UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		March 31, ~~2021~~2022
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~HERTZ GLOBAL HOLDINGS, INC.~~

~~THE HERTZ CORPORATION~~

~~(Exact name of registrant as specified in its charter)~~

~~Delaware~~Commission File Number

Exact Name of Registrant as Specified in its Charter,
Principal Executive Office Address and Telephone Number

State of Incorporation

I.R.S. Employer Identification No.

001-37665

HERTZ GLOBAL HOLDINGS, INC

Delaware

61-1770902

~~Delaware~~8501 Williams Road,

Estero,

Florida

33928

~~001-07541~~

~~13-1938568~~

(State or other jurisdiction of
incorporation or organization)(239)

~~(Commission File Number)~~301-7000

~~(I.R.S. Employer Identification No.)~~

~~8501 Williams Road~~

001-07541

THE HERTZ CORPORATION

Delaware

13-1938568

8501 Williams Road,

Estero,

Florida

33928

~~239~~

~~301-7000~~

(Address, including Zip Code, and
telephone number, including area code,
of registrant's principal executive offices)(239)

301-7000

~~Not Applicable~~

(Former name, former address and
former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which Registered

Hertz Global Holdings, Inc.

Common Stock

~~par~~Par value $0.01 per share

~~HTZGQ~~HTZ

Nasdaq Global Select

Hertz Global Holdings, Inc.

*Warrants to purchase common stock

Each exercisable for one share of Hertz Global Holdings, Inc. common stock at an exercise price of $13.80 per share, subject to adjustment

HTZWW

Nasdaq Global Select

The Hertz Corporation

None

*Hertz Global's common stock began trading exclusively on the over-the-counter market on October 30, 2020 under the symbol HTZGQ.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation Yes ☒☐ No ☐☒

1(Note: As a voluntary filer, The Hertz Corporation is not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act. The Hertz Corporation has filed all reports pursuant to Section 13 or 15(d) of the Exchange Act during the preceding 12 months as if it was subject to such filing requirements.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Hertz Global Holdings, Inc.

Large accelerated filer

☐☒

Accelerated filer

☒☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

The Hertz Corporation

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Hertz Global Holdings, Inc. Yes ☐ No ☒

The Hertz Corporation Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Class

Shares Outstanding as of

~~May 3, 2021~~April 21, 2022

Hertz Global Holdings, Inc.

Common Stock,

par value $0.01 per share

~~156,206,478~~412,111,348

The Hertz Corporation(1)

Common Stock,

par value $0.01 per share

100

(1)(100% owned by

Rental Car Intermediate Holdings, LLC)

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

TABLE OF CONTENTS

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Index


		Page
Hertz Global Holdings, Inc. and Subsidiaries ~~(Debtor-in-Possession)~~
Condensed Consolidated Balance Sheets as of March 31,~~, 202~~1 2022 and December 31, 20 202021		2
Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021		3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021		4
Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021		5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31,~~, 202~~1 2022 and 20 202021		6
The Hertz Corporation and Subsidiaries ~~(Debtor-in-Possession)~~
Condensed Consolidated Balance Sheets as of March 3 1 ~~, 202~~1 31, 2022 and December 31, 20 202021		8
Condensed Consolidated Statements of Operations for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021		9
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 3 1 ~~, 202~~1 31, 2022 and 20 202021		10
Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021		11
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021		12
Notes to the Condensed Consolidated Financial Statements
Note 1	Background	14
Note 2	Basis of Presentation ~~and Recently Issued Accounting Pronouncements~~	1814


Note 3	Divestitures	1915
Note 4	Revenue Earning Vehicles	2015

Note 5	~~Goodwill and Intangible Assets, Net~~Debt	2016
Note 6	~~Debt~~Leases	2120

Note 7	~~Leases~~	26
~~Note 8~~	~~Restructuring~~	27
~~Note 9~~	Income Tax (Provision) Benefit	2820
Note 8	Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global	21


Note 9	Stock-Based Compensation	22
Note 10	~~Earnings (Loss) Per Share~~ F –inancial Inst ~~Hertz Global~~ruments	2824

Note 11	Fair Value Measurements	2925
Note 12	Contingencies and Off-Balance Sheet Commitments	3026
Note 13	Related Party Transactions	3229
Note 14	Segment Information	3329


Note 15	~~Liabilities Subject to Compromise~~	37
~~Note 16~~	Reorganization Items, Net	3733
~~Note 17~~	~~Condensed Combined Debtor-in-Possession Financial Information~~	37

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,087	$	1,096	Cash and cash equivalents	$	1,521	$	2,258
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	119		50		Vehicle	301		77
Non-vehicle	Non-vehicle	1,234		361		Non-vehicle	300		316
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	1,353		411		Total restricted cash and cash equivalents	601		393
Total cash, cash equivalents, restricted cash and restricted cash equivalents		2,440		1,507
Total cash and cash equivalents and restricted cash and cash equivalents						Total cash and cash equivalents and restricted cash and cash equivalents	2,122		2,651
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	157		164		Vehicle	93		62
Non-vehicle, net of allowance of $56 and $46, respectively		636		613
Non-vehicle, net of allowance of $45 and $48, respectively						Non-vehicle, net of allowance of $45 and $48, respectively	707		696
Total receivables, net	Total receivables, net	793		777		Total receivables, net	800		758
Prepaid expenses and other assets	Prepaid expenses and other assets	786		373		Prepaid expenses and other assets	1,331		1,017
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	7,919		7,540		Vehicles	12,118		10,836
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,554)		(1,610)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	6,360		6,062		Total revenue earning vehicles, net	10,564		9,226
Property and equipment, net	Property and equipment, net	637		666		Property and equipment, net	611		608
Operating lease right-of-use assets	Operating lease right-of-use assets	1,580		1,675		Operating lease right-of-use assets	1,566		1,566
Intangible assets, net	Intangible assets, net	2,969		2,992		Intangible assets, net	2,903		2,912
Goodwill	Goodwill	1,045		1,045		Goodwill	1,044		1,045
Assets held for sale		0		1,811
Total assets(a)		$	16,610	$	16,908

Total assets(1)						Total assets(1)	$	20,941	$	19,783
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	141	$	29	Vehicle	$	109	$	56
Non-vehicle	Non-vehicle	390		389		Non-vehicle	566		516
Total accounts payable	Total accounts payable	531		418		Total accounts payable	675		572
Accrued liabilities	Accrued liabilities	824		759		Accrued liabilities	939		863
Accrued taxes, net	Accrued taxes, net	161		121		Accrued taxes, net	188		157
Debt:	Debt:					Debt:
Vehicle	Vehicle	6,286		6,024		Vehicle	9,098		7,921
Non-vehicle	Non-vehicle	740		243		Non-vehicle	2,984		2,986
Total debt	Total debt	7,026		6,267		Total debt	12,082		10,907
Public Warrants						Public Warrants	1,272		1,324
Operating lease liabilities	Operating lease liabilities	1,541		1,636		Operating lease liabilities	1,502		1,510
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	468		463
Deferred income taxes, net	Deferred income taxes, net	789		730		Deferred income taxes, net	1,113		1,010
Total liabilities not subject to compromise		11,342		10,419
Liabilities subject to compromise		4,978		4,965
Liabilities held for sale		0		1,431
Total liabilities(a)		16,320		16,815

Total liabilities(1)						Total liabilities(1)	18,239		16,806
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, $0.01 par value, 0 shares issued and outstanding	Preferred stock, $0.01 par value, 0 shares issued and outstanding	0		0		Preferred stock, $0.01 par value, 0 shares issued and outstanding	—		—
Common stock, $0.01 par value, 158,235,410 shares issued and 156,206,478 shares outstanding at March 31, 2021 and December 31, 2020		2		2
Common stock, $0.01 par value, 477,673,065 and 477,233,278 shares issued, respectively, and 415,256,346 and 449,782,424 shares outstanding, respectively						Common stock, $0.01 par value, 477,673,065 and 477,233,278 shares issued, respectively, and 415,256,346 and 449,782,424 shares outstanding, respectively	5		5
Treasury stock, at cost, 62,416,719 and 27,450,854 common shares, respectively						Treasury stock, at cost, 62,416,719 and 27,450,854 common shares, respectively	(1,430)		(708)
Additional paid-in capital	Additional paid-in capital	3,049		3,047		Additional paid-in capital	6,237		6,209
Accumulated deficit		(2,491)		(2,681)
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	(1,889)		(2,315)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(195)		(212)		Accumulated other comprehensive income (loss)	(221)		(214)
Treasury stock, at cost, 2,028,932 shares at March 31, 2021 and December 31, 2020		(100)		(100)
Stockholders' equity attributable to Hertz Global		265		56
Noncontrolling interests		25		37

Total stockholders' equity	Total stockholders' equity	290		93		Total stockholders' equity	2,702		2,977
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	16,610	$	16,908	Total liabilities and stockholders' equity	$	20,941	$	19,783

~~(a)~~(1) Hertz Global Holdings, Inc.'s consolidated total assets as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of variable interest entities (“VIEs”) of ~~$513~~$706 million and ~~$511~~$734 million, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total liabilities of VIEs of ~~$393~~$706 million and ~~$475~~$733 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc. See ~~"Special Purpose Entities"~~"Pledges Related to Vehicle Financing" in Note 6,5, "Debt,~~" and "767 Auto Leasing LLC" in Note 13, "Related Party Transactions,~~" for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions, except per share data)


		Three Months Ended March 31,
		2021		2020			Three Months Ended March 31,
Revenues:
Worldwide vehicle rental		$	1,153	$	1,749
All other operations		136		174
Total revenues		1,289		1,923
							2022		2021

Revenues						Revenues	$	1,810	$	1,289
Expenses:	Expenses:					Expenses:
Direct vehicle and operating	Direct vehicle and operating	827		1,241		Direct vehicle and operating	1,053		778
Depreciation of revenue earning vehicles and lease charges		243		677
Depreciation of revenue earning vehicles and lease charges, net						Depreciation of revenue earning vehicles and lease charges, net	(59)		243
Non-vehicle depreciation and amortization						Non-vehicle depreciation and amortization	33		54
Selling, general and administrative	Selling, general and administrative	156		208		Selling, general and administrative	235		151
Interest expense, net:	Interest expense, net:					Interest expense, net:
Vehicle	Vehicle	104		118		Vehicle	5		104
Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021)	Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021)	44		57		Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021)	39		44
Total interest expense, net	Total interest expense, net	148		175		Total interest expense, net	44		148

Other (income) expense, net	Other (income) expense, net	(3)		(17)		Other (income) expense, net	(2)		(3)
Reorganization items, net	Reorganization items, net	42		0		Reorganization items, net	—		42
(Gain) from the sale of a business	(Gain) from the sale of a business	(392)		0		(Gain) from the sale of a business	—		(392)
Change in fair value of Public Warrants						Change in fair value of Public Warrants	(50)		—
Total expenses	Total expenses	1,021		2,284		Total expenses	1,254		1,021
Income (loss) before income taxes	Income (loss) before income taxes	268		(361)		Income (loss) before income taxes	556		268
Income tax (provision) benefit	Income tax (provision) benefit	(79)		4		Income tax (provision) benefit	(130)		(79)
Net income (loss)	Net income (loss)	189		(357)		Net income (loss)	426		189
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	1		1		Net (income) loss attributable to noncontrolling interests	—		1
Net income (loss) attributable to Hertz Global	Net income (loss) attributable to Hertz Global	$	190	$	(356)	Net income (loss) attributable to Hertz Global	$	426	$	190
Weighted-average shares outstanding:

Weighted-average common shares outstanding:						Weighted-average common shares outstanding:
Basic	Basic	156		142		Basic	432		156
Diluted	Diluted	157		142		Diluted	461		157
Earnings (loss) per share:
Basic earnings (loss) per share		$	1.22	$	(2.50)
Diluted earnings (loss) per share		$	1.21	$	(2.50)
Earnings (loss) per common share:						Earnings (loss) per common share:
Basic						Basic	$	0.99	$	1.22
Diluted						Diluted	$	0.82	$	1.21

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(In millions)

Three Months Ended
March 31,
2021 2020
Net income (loss) $ 189 $ (357)
Other comprehensive income (loss):
Foreign currency translation adjustments 17 (41)
Net gain (loss) on pension and postretirement benefit plans 0 1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses 0 1
Total other comprehensive income (loss) before income taxes 17 (39)
Total other comprehensive income (loss) 17 (39)
Total comprehensive income (loss) 206 (396)
Comprehensive (income) loss attributable to noncontrolling interests 1 1
Comprehensive income (loss) attributable to Hertz Global $ 207 $ (395)



	Three Months Ended March 31,
	2022		2021
Net income (loss)	$	426	$	189
Other comprehensive income (loss):
Foreign currency translation adjustments	(7)		17






Total other comprehensive income (loss)	(7)		17
Total comprehensive income (loss)	419		206
Comprehensive (income) loss attributable to noncontrolling interests	—		1
Comprehensive income (loss) attributable to Hertz Global	$	419	$	207

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Unaudited

(In millions)

Preferred Stock
Shares Common Stock Shares Common Stock Amount Additional
Paid-In Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock Shares Treasury Stock Amount Stockholders'
Equity
Attributable to
Hertz Global Non-
controlling Interests Total Stockholders' Equity
Balance as of:
December 31, 2019 0 142 $ 1 $ 3,024 $ (967) $ (189) 2 $ (100) $ 1,769 $ 119 $ 1,888
Net income (loss) — — — — (356) — — — (356) (1) (357)
Other comprehensive income (loss) — — — — — (39) — — (39) — (39)
Net settlement on vesting of restricted stock — — — (2) — — — — (2) — (2)
Contributions from noncontrolling interests — — — — — — — — — 1 1
March 31, 2020 0 142 $ 1 $ 3,022 $ (1,323) $ (228) 2 $ (100) $ 1,372 $ 119 $ 1,491


	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Stockholders' Equity Attributable to Hertz Global		Non- controlling Interests(1)		Total Stockholders' Equity
Balance as of:
December 31, 2020	—	$	—	156	$	2	$	3,047	$	(2,681)	$	(212)	2	$	(100)	$	56	$	37	$	93
Net income (loss)	—	—		—	—		—		190		—		—	—		190		(1)		189
Other comprehensive income (loss)	—	—		—	—		—		—		17		—	—		17		—		17

Stock-based compensation charges	—	—		—	—		2		—		—		—	—		2		—		2
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—	—		—		(11)		(11)
March 31, 2021	—	$	—	156	$	2	$	3,049	$	(2,491)	$	(195)	2	$	(100)	$	265	$	25	$	290


		Preferred Stock Shares	Common Stock Shares	Common Stock Amount				Additional Paid-In Capital		Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Treasury Stock Shares			Treasury Stock Amount			Stockholders' Equity Attributable to Hertz Global			Non- controlling Interests				Total Stockholders' Equity					Preferred Stock Shares				Preferred Stock Amount						Common Stock Shares			Common Stock Amount			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Shares			Treasury Stock Amount			Total Stockholders' Equity
Balance as of:	Balance as of:																		Balance as of:				Common Stock Shares							Additional Paid-In Capital
December 31, 2020		0	156			$	2					$	3,047			$	(2,681)		$	(212)				2			$	(100)									$	56			$	37	$	93
December 31, 2021																																	December 31, 2021		—				$	—					450			$	5		$	6,209		$	(2,315)		$	(214)		27			$	(708)		$	2,977
Net income (loss)	Net income (loss)	—	—	—				—		190				—				—			—					190			(1)				189			Net income (loss)		—				—					—			—			—			426			—			—			—			426
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				17				—			—			17			—				17			Other comprehensive income (loss)		—				—						—			—			—			—			(7)			—			—			(7)
Net settlement on vesting of restricted stock																																	Net settlement on vesting of restricted stock		—				—						—			—			(4)			—			—			—			—			(4)
Stock-based compensation charges																																	Stock-based compensation charges		—				—						—			—			28			—			—			—			—			28
Public Warrant exercises(2)																																	Public Warrant exercises(2)		—				—						—			—			4			—			—			—			—			4
Share repurchases																																	Share repurchases		—				—						(35)			—			—			—			—			35			(722)			(722)

Stock-based compensation charges		—	—	—				2		—				—				—			—			2			—				2
Distributions to noncontrolling interests		—	—	—				—		—				—				—			—			—			(11)				(11)
March 31, 2021		0	156	$	2			$	3,049	$	(2,491)			$	(195)			2			$	(100)		$	265		$	25			$	290
March 31, 2022																																	March 31, 2022		—				$	—					415			$	5		$	6,237		$	(1,889)		$	(221)		62			$	(1,430)		$	2,702

(1) See "767 Auto Leasing LLC" in Note 13, "Related Party Transactions."

(2) See Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global."

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	189	$	(357)	Net income (loss)	$	426	$	189
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles		275		733
Depreciation and reserves for revenue earning vehicles, net						Depreciation and reserves for revenue earning vehicles, net	(20)		275
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	54		53		Depreciation and amortization, non-vehicle	33		54
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	34		12		Amortization of deferred financing costs and debt discount (premium)	11		34

Stock-based compensation charges						Stock-based compensation charges	28		2
Provision for receivables allowance	Provision for receivables allowance	29		15		Provision for receivables allowance	13		29
Deferred income taxes, net	Deferred income taxes, net	62		(13)		Deferred income taxes, net	103		62

Non-cash reorganization items, net		(15)		0
Reorganization items, net						Reorganization items, net	—		(15)
(Gain) loss from the sale of a business	(Gain) loss from the sale of a business	(392)		0		(Gain) loss from the sale of a business	—		(392)
(Gain) loss on sale of non-vehicle capital assets		(1)		(21)

Change in fair value of Public Warrants						Change in fair value of Public Warrants	(50)		—
(Gain) loss on financial instruments						(Gain) loss on financial instruments	(44)		1

Other	Other	2		4		Other	(1)		(2)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(73)		226		Non-vehicle receivables	(43)		(73)
Prepaid expenses and other assets	Prepaid expenses and other assets	(87)		(61)		Prepaid expenses and other assets	(40)		(87)
Operating lease right-of-use assets	Operating lease right-of-use assets	78		100		Operating lease right-of-use assets	72		78
Non-vehicle accounts payable	Non-vehicle accounts payable	40		(86)		Non-vehicle accounts payable	51		40
Accrued liabilities	Accrued liabilities	62		(59)		Accrued liabilities	124		62
Accrued taxes, net	Accrued taxes, net	36		(14)		Accrued taxes, net	30		36
Operating lease liabilities	Operating lease liabilities	(78)		(66)		Operating lease liabilities	(80)		(78)
Self-insured liabilities	Self-insured liabilities	(15)		(17)		Self-insured liabilities	8		(15)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	200		449		Net cash provided by (used in) operating activities	621		200
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(1,517)		(4,346)		Revenue earning vehicles expenditures	(2,985)		(1,517)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	686		2,212		Proceeds from disposal of revenue earning vehicles	1,471		686
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(9)		(59)		Non-vehicle capital asset expenditures	(30)		(9)
Proceeds from non-vehicle capital assets disposed of or to be disposed of	Proceeds from non-vehicle capital assets disposed of or to be disposed of	4		23		Proceeds from non-vehicle capital assets disposed of or to be disposed of	1		4
Sales of marketable securities		0		74

Collateral returned in exchange for letters of credit						Collateral returned in exchange for letters of credit	17		—
Return of (investment in) equity investments						Return of (investment in) equity investments	(15)		—
Proceeds from the sale of a business, net of cash sold	Proceeds from the sale of a business, net of cash sold	818		0		Proceeds from the sale of a business, net of cash sold	—		818
Other		0		(1)

Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(18)		(2,097)		Net cash provided by (used in) investing activities	(1,541)		(18)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from issuance of vehicle debt	Proceeds from issuance of vehicle debt	1,096		3,661		Proceeds from issuance of vehicle debt	4,680		1,096
Repayments of vehicle debt	Repayments of vehicle debt	(946)		(2,538)		Repayments of vehicle debt	(3,492)		(946)
Proceeds from issuance of non-vehicle debt	Proceeds from issuance of non-vehicle debt	560		1,440		Proceeds from issuance of non-vehicle debt	—		560
Repayments of non-vehicle debt	Repayments of non-vehicle debt	(1)		(851)		Repayments of non-vehicle debt	(5)		(1)
Payment of financing costs		(7)		(9)

Contributions from (distributions to) noncontrolling interests		(10)		0

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)

Three Months Ended
March 31,
2021 2020
Other 0 (2)
Net cash provided by (used in) financing activities 692 1,701
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (12) (4)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 862 49
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)
1,578 1,360
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 2,440 $ 1,409
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle $ 69 $ 103
Non-vehicle 30 26
Income taxes, net of refunds (4) 5
Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives $ 103 $ 200
Sales of revenue earning vehicles included in vehicle receivables 119 1,043
Purchases of non-vehicle capital assets included in accounts payable 6 32
Purchases of non-vehicle capital assets included in liabilities subject to compromise 16 0
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease 21 4


	Three Months Ended March 31,
	2022		2021
Payment of financing costs	(24)		(7)




Proceeds from exercises of Public Warrants	3		—

Share repurchases	(766)		—


Contributions from (distributions to) noncontrolling interests	—		(10)
Other	(4)		—
Net cash provided by (used in) financing activities	392		692
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(1)		(12)
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents during the period	(529)		862
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(1)	2,651		1,578
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	2,122	$	2,440

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle	$	39	$	69
Non-vehicle	17		30
Income taxes, net of refunds	6		(4)

Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	82	$	103
Sales of revenue earning vehicles included in vehicle receivables	65		119

Purchases of non-vehicle capital assets included in accounts payable	23		6
Purchases of non-vehicle capital assets included in liabilities subject to compromise	—		16
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease	5		21


Public Warrant exercises	2		—
Accrual for purchases of treasury shares	10		—

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which ~~are~~were held for sale at December 31, 2020, prior to the completion of the Donlen Sale in the first quarter of 2021, as disclosed in Note 3, "Divestitures."

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,087	$	1,096	Cash and cash equivalents	$	1,520	$	2,257
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	119		50		Vehicle	301		77
Non-vehicle	Non-vehicle	1,206		333		Non-vehicle	300		316
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	1,325		383		Total restricted cash and cash equivalents	601		393
Total cash, cash equivalents, restricted cash and restricted cash equivalents		2,412		1,479
Total cash and cash equivalents and restricted cash and cash equivalents						Total cash and cash equivalents and restricted cash and cash equivalents	2,121		2,650
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	157		164		Vehicle	93		62
Non-vehicle, net of allowance of $56 and $46, respectively		636		613
Non-vehicle, net of allowance of $45 and $48, respectively						Non-vehicle, net of allowance of $45 and $48, respectively	706		695
Total receivables, net	Total receivables, net	793		777		Total receivables, net	799		757
Due from Hertz Holdings		1		1

Prepaid expenses and other assets	Prepaid expenses and other assets	785		372		Prepaid expenses and other assets	1,332		1,016
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	7,919		7,540		Vehicles	12,118		10,836
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,554)		(1,610)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	6,360		6,062		Total revenue earning vehicles, net	10,564		9,226
Property and equipment, net	Property and equipment, net	637		666		Property and equipment, net	611		608
Operating lease right-of-use assets	Operating lease right-of-use assets	1,580		1,675		Operating lease right-of-use assets	1,566		1,566
Intangible assets, net	Intangible assets, net	2,969		2,992		Intangible assets, net	2,903		2,912
Goodwill	Goodwill	1,045		1,045		Goodwill	1,044		1,045
Assets held for sale		0		1,811
Total assets(a)		$	16,582	$	16,880
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

Total assets(1)						Total assets(1)	$	20,940	$	19,780
LIABILITIES AND STOCKHOLDER'S EQUITY						LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	141	$	29	Vehicle	$	109	$	56
Non-vehicle	Non-vehicle	390		389		Non-vehicle	566		516
Total accounts payable	Total accounts payable	531		418		Total accounts payable	675		572
Accrued liabilities	Accrued liabilities	825		759		Accrued liabilities	929		809
Accrued taxes, net	Accrued taxes, net	161		121		Accrued taxes, net	188		157
Debt:	Debt:					Debt:
Vehicle	Vehicle	6,286		6,024		Vehicle	9,098		7,921
Non-vehicle	Non-vehicle	740		243		Non-vehicle	2,984		2,986
Total debt	Total debt	7,026		6,267		Total debt	12,082		10,907
Operating lease liabilities	Operating lease liabilities	1,541		1,636		Operating lease liabilities	1,502		1,510
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	468		463
Deferred income taxes, net	Deferred income taxes, net	793		735		Deferred income taxes, net	1,116		1,012
Total liabilities not subject to compromise		11,347		10,424
Liabilities subject to compromise		5,043		5,030
Liabilities held for sale		0		1,431
Total liabilities(a)		16,390		16,885

Total liabilities(1)						Total liabilities(1)	16,960		15,430
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Stockholder's equity (deficit):
Common stock, $0.01 par value, 100 and 100 shares issued and outstanding, respectively		0		0
Stockholder's equity:						Stockholder's equity:
Common stock, $0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding						Common stock, $0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding	—		—
Additional paid-in capital	Additional paid-in capital	3,955		3,953		Additional paid-in capital	6,451		7,190

Accumulated deficit		(3,593)		(3,783)
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	(2,250)		(2,626)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(195)		(212)		Accumulated other comprehensive income (loss)	(221)		(214)
Stockholder's equity (deficit) attributable to Hertz		167		(42)
Noncontrolling interests		25		37
Total stockholder's equity (deficit)		192		(5)
Total liabilities and stockholder's equity (deficit)		$	16,582	$	16,880

Total stockholder's equity						Total stockholder's equity	3,980		4,350
Total liabilities and stockholder's equity						Total liabilities and stockholder's equity	$	20,940	$	19,780

~~(a)~~(1) The Hertz Corporation's consolidated total assets as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of VIEs of ~~$513~~$706 million and ~~$511~~$734 million, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total liabilities of VIEs of ~~$393~~$706 million and ~~$475~~$733 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation. See ~~"Special Purpose Entities"~~"Pledges Related to Vehicle Financing" in Note 6,5, "Debt,~~" and "767 Auto Leasing LLC" in Note 13, "Related Party Transactions,~~" for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions)

Three Months Ended
March 31,
2021 2020
Revenues:
Worldwide vehicle rental $ 1,153 $ 1,749
All other operations 136 174
Total revenues 1,289 1,923
Expenses:
Direct vehicle and operating 827 1,241
Depreciation of revenue earning vehicles and lease charges 243 677
Selling, general and administrative 156 208
Interest expense, net:
Vehicle 104 118
Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021) 44 55
Total interest expense, net 148 173
Other (income) expense, net (3) (17)
Reorganization items, net 42 0
(Gain) from the sale of a business (392) 0
Total expenses 1,021 2,282
Income (loss) before income taxes 268 (359)
Income tax (provision) benefit (79) 3
Net income (loss) 189 (356)
Net (income) loss attributable to noncontrolling interests 1 1
Net income (loss) attributable to Hertz $ 190 $ (355)



	Three Months Ended March 31,
	2022		2021



Revenues	$	1,810	$	1,289
Expenses:
Direct vehicle and operating	1,053		778
Depreciation of revenue earning vehicles and lease charges, net	(59)		243
Non-vehicle depreciation and amortization	33		54
Selling, general and administrative	235		151
Interest expense, net:
Vehicle	5		104
Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021)	39		44
Total interest expense, net	44		148


Other (income) expense, net	(2)		(3)
Reorganization items, net	—		42
(Gain) from the sale of a business	—		(392)
Total expenses	1,304		1,021
Income (loss) before income taxes	506		268
Income tax (provision) benefit	(130)		(79)
Net income (loss)	376		189
Net (income) loss attributable to noncontrolling interests	—		1
Net income (loss) attributable to Hertz	$	376	$	190

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(In millions)

Three Months Ended
March 31,
2021 2020
Net income (loss) $ 189 $ (356)
Other comprehensive income (loss):
Foreign currency translation adjustments 17 (41)
Net gain (loss) on pension and postretirement benefit plans 0 1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses 0 1
Total other comprehensive income (loss) before income taxes 17 (39)
Total other comprehensive income (loss) 17 (39)
Total comprehensive income (loss) 206 (395)
Comprehensive (income) loss attributable to noncontrolling interests 1 1
Comprehensive income (loss) attributable to Hertz Global $ 207 $ (394)



	Three Months Ended March 31,
	2022		2021
Net income (loss)	$	376	$	189
Other comprehensive income (loss):
Foreign currency translation adjustments	(7)		17






Total other comprehensive income (loss)	(7)		17
Total comprehensive income (loss)	369		206
Comprehensive (income) loss attributable to noncontrolling interests	—		1
Comprehensive income (loss) attributable to Hertz	$	369	$	207

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)

Unaudited

(In millions, except share data)

Common Stock Shares Common Stock Amount Additional
Paid-In Capital Due From Affiliate Accumulated
Deficit Accumulated
Other
Comprehensive
Income (Loss) Stockholder's Equity Attributable to Hertz Noncontrolling Interests Total Stockholder's Equity
Balance as of:
December 31, 2019 100 $ 0 $ 3,955 $ (64) $ (1,937) $ (189) $ 1,765 $ 119 $ 1,884
Net income (loss) — — — — (355) — (355) (1) (356)
Due from Hertz Holdings — — — (3) — — (3) — (3)
Other comprehensive income (loss) — — — — — (39) (39) — (39)
Contributions from noncontrolling interests — — — — — — — 1 1
March 31, 2020 100 $ 0 $ 3,955 $ (67) $ (2,292) $ (228) $ 1,368 $ 119 $ 1,487


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Stockholder's Equity Attributable to Hertz		Noncontrolling Interests(1)		Total Stockholder's Equity (Deficit)
Balance as of:
December 31, 2020	100	$	—	$	3,953	$	(3,783)	$	(212)	$	(42)	$	37	$	(5)
Net income (loss)	—	—		—		190		—		190		(1)		189
Other comprehensive income (loss)	—	—		—		—		17		17		—		17
Stock-based compensation charges	—	—		2		—		—		2		—		2
Distributions to noncontrolling interests	—	—		—		—		—		—		(11)		(11)
March 31, 2021	100	$	—	$	3,955	$	(3,593)	$	(195)	$	167	$	25	$	192


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholder's Equity
Balance as of:
December 31, 2021	100	$	—	$	7,190	$	(2,626)	$	(214)	$	4,350
Net income (loss)	—	—		—		376		—		376
Other comprehensive income (loss)	—	—		—		—		(7)		(7)
Stock-based compensation charges	—	—		28		—		—		28
Dividends paid to Hertz Holdings(2)	—	—		(767)		—		—		(767)
March 31, 2022	100	$	—	$	6,451	$	(2,250)	$	(221)	$	3,980

(1) See "767 Auto Leasing LLC" in Note 13, "Related Party Transactions."

Common Stock Shares Common Stock Amount Additional
Paid-In Capital Accumulated
Deficit Accumulated
Other Comprehensive
Income (Loss) Stockholder's Equity Attributable to Hertz Noncontrolling Interests Total Stockholder's Equity (Deficit)
Balance as of:
December 31, 2020 100 $ 0 $ 3,953 $ (3,783) $ (212) $ (42) $ 37 $ (5)
Net income (loss) — — — 190 — 190 (1) 189
Other comprehensive income (loss) — — — — 17 17 — 17
Stock-based compensation charges — — 2 — — 2 — 2
Distributions to noncontrolling interests — — — — — — (11) (11)
March 31, 2021 100 $ 0 $ 3,955 $ (3,593) $ (195) $ 167 $ 25 $ 192
(2) See "Share Repurchase Program for Common Stock" in Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," for additional information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	189	$	(356)	Net income (loss)	$	376	$	189
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles		275		733
Depreciation and reserves for revenue earning vehicles, net						Depreciation and reserves for revenue earning vehicles, net	(20)		275
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	54		53		Depreciation and amortization, non-vehicle	33		54
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	34		12		Amortization of deferred financing costs and debt discount (premium)	11		34

Stock-based compensation charges						Stock-based compensation charges	28		2
Provision for receivables allowance	Provision for receivables allowance	29		15		Provision for receivables allowance	13		29
Deferred income taxes, net	Deferred income taxes, net	62		(12)		Deferred income taxes, net	103		62
Non-cash reorganization items, net		(15)		0

Reorganization items, net						Reorganization items, net	—		(15)
(Gain) loss from the sale of a business						(Gain) loss from the sale of a business	—		(392)

(Gain) loss from the sale of a business		(392)		0
(Gain) loss on sale of non-vehicle capital assets		(1)		(21)

(Gain) loss on financial instruments						(Gain) loss on financial instruments	(44)		1
Other	Other	2		3		Other	(1)		(2)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(73)		226		Non-vehicle receivables	(43)		(73)
Prepaid expenses and other assets	Prepaid expenses and other assets	(87)		(61)		Prepaid expenses and other assets	(40)		(87)
Operating lease right-of-use assets	Operating lease right-of-use assets	78		100		Operating lease right-of-use assets	72		78
Non-vehicle accounts payable	Non-vehicle accounts payable	40		(86)		Non-vehicle accounts payable	51		40
Accrued liabilities	Accrued liabilities	62		(59)		Accrued liabilities	124		62
Accrued taxes, net	Accrued taxes, net	36		(14)		Accrued taxes, net	30		36
Operating lease liabilities	Operating lease liabilities	(78)		(66)		Operating lease liabilities	(80)		(78)
Self-insured liabilities	Self-insured liabilities	(15)		(17)		Self-insured liabilities	8		(15)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	200		450		Net cash provided by (used in) operating activities	621		200
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(1,517)		(4,346)		Revenue earning vehicles expenditures	(2,985)		(1,517)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	686		2,212		Proceeds from disposal of revenue earning vehicles	1,471		686
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(9)		(59)		Non-vehicle capital asset expenditures	(30)		(9)
Proceeds from non-vehicle capital assets disposed of or to be disposed of	Proceeds from non-vehicle capital assets disposed of or to be disposed of	4		23		Proceeds from non-vehicle capital assets disposed of or to be disposed of	1		4
Sales of marketable securities		0		74
Return of (investment in) equity investments						Return of (investment in) equity investments	(15)		—

Collateral returned in exchange for letters of credit						Collateral returned in exchange for letters of credit	17		—
Proceeds from the sale of a business, net of cash sold	Proceeds from the sale of a business, net of cash sold	818		0		Proceeds from the sale of a business, net of cash sold	—		818
Other		0		(1)

Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(18)		(2,097)		Net cash provided by (used in) investing activities	(1,541)		(18)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from issuance of vehicle debt	Proceeds from issuance of vehicle debt	1,096		3,661		Proceeds from issuance of vehicle debt	4,680		1,096
Repayments of vehicle debt	Repayments of vehicle debt	(946)		(2,538)		Repayments of vehicle debt	(3,492)		(946)
Proceeds from issuance of non-vehicle debt	Proceeds from issuance of non-vehicle debt	560		1,440		Proceeds from issuance of non-vehicle debt	—		560
Repayments of non-vehicle debt	Repayments of non-vehicle debt	(1)		(851)		Repayments of non-vehicle debt	(5)		(1)
Payment of financing costs	Payment of financing costs	(7)		(9)		Payment of financing costs	(24)		(7)
Advances to Hertz Holdings		0		(3)

The accompanying notes are an integral part of these financial statements.

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THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)

Three Months Ended
March 31,
2021 2020
Contributions from (distributions to) noncontrolling interests (10) 0
Net cash provided by (used in) financing activities 692 1,700
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (12) (4)
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 862 49
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)
1,550 1,360
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 2,412 $ 1,409
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle $ 69 $ 103
Non-vehicle 30 26
Income taxes, net of refunds (4) 5
Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives $ 103 $ 200
Sales of revenue earning vehicles included in vehicle receivables 119 1,043
Purchases of non-vehicle capital assets included in accounts payable 6 32
Revenue earning vehicles and non-vehicle capital assets acquired through capital leases 21 4
Purchases of non-vehicle capital assets included in liabilities subject to compromise 16 0


	Three Months Ended March 31,
	2022		2021
Dividends paid to Hertz Holdings	(767)		—
Contributions from (distributions to) noncontrolling interests	—		(10)

Net cash provided by (used in) financing activities	392		692
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(1)		(12)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period	(529)		862
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(1)	2,650		1,550
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	2,121	$	2,412

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle	$	39	$	69
Non-vehicle	17		30
Income taxes, net of refunds	6		(4)

Supplemental disclosures of non-cash information:

Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	82	$	103
Sales of revenue earning vehicles included in vehicle receivables	65		119

Purchases of non-vehicle capital assets included in accounts payable	23		6
Purchases of non-vehicle capital assets included in liabilities subject to compromise	—		16
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease	5		21

The accompanying notes are an integral part of these financial statements.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1—Background

Hertz Global Holdings, Inc. ("Hertz Global" when including its subsidiaries and VIEs and "Hertz Holdings" when excluding its subsidiaries and VIEs) was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns The Hertz Corporation ("Hertz" and interchangeably with Hertz Global, the "Company"), Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918. On May 22, 2020, as a result of the impact from the COVID-19 global pandemic, Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S. and Canada (the "Debtors") filed voluntary petitions for relief under chapter 11 of title 11 ("Chapter 11") of the U.S. Bankruptcy Code (the "Chapter 11 Cases") in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). On June 10, 2021, a plan of reorganization (the "Plan of Reorganization") was confirmed by the Bankruptcy Court and on June 30, 2021, the Plan of Reorganization became effective and the Debtors emerged from Chapter 11.

Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-owned, licensee and franchisee locations in the United States ("U.S."), Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand. The Company also sells vehicles through Hertz Car Sales and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. As disclosed in Note 3, "Divestitures," on March 30, 2021 the Company completed the ~~previously announced~~ sale of substantially all of the assets and certain liabilities of its Donlen subsidiary (the "Donlen Sale"), a business which ~~provides~~provided vehicle leasing and fleet management services.

~~Voluntary Petitions for Bankruptcy~~

In March 2020, the World Health Organization declared COVID-19 a global pandemic. In response to COVID-19, local and national governments around the world instituted shelter-in-place and similar orders and travel restrictions, and airline and other travel decreased suddenly and dramatically. As a result of the impact on travel demand, late in the first quarter of 2020, the Company experienced a high level of rental cancellations and a significant decline in forward bookings. In response, the Company began aggressive actions to eliminate costs. However, it faced significant ongoing expenses.

On May 22, 2020 (the "Petition Date"), Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S. and Canada (collectively the "Debtors" and the "Debtors-in-Possession") filed voluntary petitions for relief (collectively, the "Petitions") under chapter 11 of title 11 ("Chapter 11") of the U.S. Bankruptcy Code (the "Bankruptcy Code") in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Chapter 11 cases (the "Chapter 11 Cases") are being jointly administered for procedural purposes only under the caption ~~In re The Hertz Corporation, et al., Case No. 20-11218 (MFW)~~.

The Debtors filed with the Bankruptcy Court a proposed Joint Chapter 11 Plan of Reorganization of the Debtors, dated as of March 1, 2021, and a related proposed Disclosure Statement. The Debtors subsequently filed with the Bankruptcy Court a proposed First Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of March 29, 2021; a proposed Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 3, 2021; a proposed Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 10, 2021; a proposed Second Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, dated as of April 14, 2021 and April 15, 2021, respectively; a proposed Third Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 16, 2021; and a proposed Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 21, 2021, which Disclosure Statement the Debtors further updated on April 21, 2021. On April 22, 2021, the Debtors filed the solicitation version of the Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors (the "Proposed Plan"), and the solicitation version of the Disclosure Statement (the "Disclosure Statement").

The Disclosure Statement describes, among other things, the events leading to the Chapter 11 Cases; the Debtors contemplated financial restructuring (the “Restructuring”); the proposed plan of reorganization; certain events that have occurred or are anticipated to occur during the Chapter 11 Cases, including the solicitation of votes to approve the Proposed Plan from certain of the Debtors’ stakeholders; certain risk factors related to the Plan, certain tax considerations, and certain other aspects of the Restructuring. The Disclosure Statement and solicitation

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

procedures with respect to the Proposed Plan was approved by the Bankruptcy Court at a hearing held on April 21, 2021 and an order to that effect was entered on April 22, 2021. The Proposed Plan is now subject to a vote by the Debtors' stakeholders and a subsequent confirmation hearing of the Bankruptcy Court, currently scheduled for June 10, 2021. In addition to approval by the Bankruptcy Court, consummation of the Proposed Plan remains subject to the satisfaction of other conditions.

Under the Proposed Plan, Centerbridge Partners, L.P., Warburg Pincus LLC, and Dundon Capital Partners, LLC (collectively, the "PE Sponsors") and certain holders of over 85% of the Debtors' unsecured notes (the "Supporting Noteholders," and together with the PE Sponsors the "Plan Sponsors") have committed to provide equity capital to fund the Debtors' exit from Chapter 11 as reflected in definitive executed documents, including (1) an Equity Purchase and Commitment Agreement (the "EPCA"), (2) a Plan Support Agreement and (3) a Bridge Financing Commitment for Hertz International Ltd. (collectively, along with the Proposed Plan and the Disclosure Statement, the "Transaction Documents"). Under the Proposed Plan, the Debtors anticipate exiting from Chapter 11 with approximately $2.2 billion of global liquidity (inclusive of capacity under the anticipated exit revolving credit facility) and only $1.3 billion in non-vehicle debt (exclusive of ABS facilities and a revolving credit facility).

The Proposed Plan is supported by the Supporting Noteholders, which comprise the vast majority of creditors in the largest class of claims that are voting on the Proposed Plan and the Official Committee of Unsecured Creditors appointed in the Chapter 11 Cases. As set forth in the Transaction Documents:

•~~the Proposed Plan will raise approximately $3.9 billion in cash proceeds, comprised of:~~

◦~~$565 million from the purchase of common stock in the reorganized entity by the Plan Sponsors;~~

◦$1.6 billion from the purchase of common stock pursuant to the rights offering contemplated by the Proposed Plan, which the Plan Sponsors have committed to ensure is fully funded pursuant to the terms of the EPCA;

◦~~$385 million from the purchase of preferred stock by plan sponsors Centerbridge Partners, L.P. and Warburg Pincus LLC; and~~

◦~~$1.3 billion in proceeds from the Company's anticipated new exit term loan facility.~~

•~~Such cash proceeds will be used, in part, to provide the following distributions to the Company's stakeholders pursuant to the terms of the Proposed Plan:~~

◦~~administrative priority and secured claims will be paid in cash in full;~~

◦~~the holders of the Company's €725 million European Vehicle Notes will be paid in cash in full;~~

◦the holders of claims with respect to the unsecured Senior Notes and holders of claims with respect to the Alternative Letter of Credit Facility will receive approximately 48.2% of the equity in the reorganized entity and the right to purchase an additional $1.6 billion of equity in the reorganized entity;

◦the holders of general unsecured claims will receive cash payments of not more than $550 million in the aggregate, which the Company estimates will provide a recovery of approximately 100 percent; and

◦the Company's existing equity will be cancelled and existing equity holders will receive new six-year warrants to purchase, in the aggregate 4%, of the reorganized entity's common stock, subject to certain conditions, with an exercise price to be determined based on an equity value of the reorganized entity of $6.1 billion.

In light of continuing interest from an alternative potential plan sponsorship group, consisting of Certares Opportunities LLC (“Certares”), Knighthead Capital Management, LLC (“Knighthead”), Apollo Capital Management, LP (“Apollo”), and certain of each of their affiliates (together with Certares, Knighthead, and Apollo the “Alternative Sponsor Group”), on April 28, 2021, the Bankruptcy Court entered an order (the “Bid Procedures Order”), among other things, establishing bidding and auction procedures relating to the submission of alternative plan proposals.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~On May 2, 2021, the Alternative Sponsor Group submitted an alternative plan proposal to the Debtors (the “Alternative Plan Proposal”).~~

On May 4, 2021, the Company determined that the Alternative Plan Proposal constitutes a “Superior Proposal” as that term is defined under the Debtors’ EPCA with the Plan Sponsors dated as of April 3, 2021 and approved by the Bankruptcy Court on April 22, 2021. Pursuant to the Bid Procedures Order, the Plan Sponsors will have until 5:00 p.m., Eastern Time, on May 7, 2021 to indicate if they intend to counter the Alternative Plan Proposal. If the Plan Sponsors determine to counter the Alternative Plan Proposal, an auction (the “Auction”) will be conducted on May 10, 2021. A hearing before the Bankruptcy Court to approve the results of the Auction along with supplemental solicitation materials, if any, will be conducted on May 14, 2021.

This Quarterly Report on Form 10-Q is not a solicitation of votes to accept or reject the Proposed Plan. Information contained in the Proposed Plan and the Disclosure Statement is subject to change, whether as a result of additional amendments or supplements to the Proposed Plan or Disclosure Statement or otherwise. The documents and other information available via website or elsewhere are not part of this Quarterly Report on Form 10-Q and shall not be deemed incorporated herein.

~~Debtors-In-Possession~~

The Debtors are currently operating as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

~~Automatic Stay~~

Subject to certain specific exceptions under the Bankruptcy Code, the Petitions automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to obligations of the Debtors incurred prior to the Petition Date ("Pre-petition"). Substantially all of the Debtors’ Pre-petition liabilities are subject to resolution as provided in the Bankruptcy Code.

~~Potential Claims~~

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification after filing. As part of the Chapter 11 Cases, parties believing that they have claims or causes of action against the Debtors may file proofs of claim evidencing such claims. Certain holders of Pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims, which was on October 21, 2020 (the “Bar Date”).

The Debtors' have received approximately 15,000 proofs of claim for an amount of approximately $104.9 billion. Such amount includes duplicate claims across multiple debtor legal entities. These claims are in the process of being reconciled to amounts recorded in the Company's accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate. The Company may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons. As a result of this process, the Company may identify additional liabilities that will need to be recorded or reclassified to liabilities subject to compromise. As of the filing of this Quarterly Report on Form 10-Q, the Company’s assessment of the validity of claims received has not been completed, but the Company does not anticipate that the amount of such claims will exceed the $550 million in cash, plus the net proceeds of certain claims of the Company, currently contemplated under the Proposed Plan. In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~time to complete and likely will continue after the Debtors emerge from bankruptcy. For additional information on the anticipated claims settlement process, please refer to the Disclosure Statement.~~

~~Borrowing Capacity and Availability~~

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of the Company's existing debt obligations. As a result of the filing of the Chapter 11 Cases, the remaining capacity under almost all of the Company's revolving credit facilities was terminated, as disclosed in Note 6, "Debt." Consequently, the proceeds of sales of vehicles which serve as collateral for such vehicle finance facilities must be applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries (as defined in Note 6, "Debt") and are not otherwise available to fund the Company’s operations. Additionally, the Company is precluded from accessing any of its subordinated investment in the vehicle collateral until the related defaults are waived or the third party funding under those facilities has been retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness. Additionally, proceeds from vehicle receivables, excluding manufacturer rebates, as of March 31, 2021 and ongoing vehicle sales must be applied to vehicle debt in amortization.

The Company had waivers related to the filing of the Chapter 11 Cases under its European ABS and U.K. Financing Facility which, in April 2021, have been superseded by a comprehensive restructuring of each the European ABS and U.K. Financing Facility, as disclosed in Note 6, "Debt."

The Company's inability to retain any proceeds from the sale of vehicles under its U.S. ABS programs means that its sources of liquidity are primarily its unrestricted cash and unrestricted cash equivalents on hand, cash generated from its operations and up to $800 million from its debtor-in-possession financing facility (the "DIP Credit Agreement"). As of March 31, 2021, the Company had total liquidity of $1.7 billion comprised of $900 million of remaining, committed availability under the DIP Credit Agreement and $812 million of unrestricted cash and unrestricted cash equivalents, net of the $275 million minimum liquidity requirement under the DIP Credit Agreement, which the Company believes will be sufficient to fund its operations through approximately March 31, 2022, assuming it does not experience any unforeseen liquidity needs before then, which could result in the utilization of the liquidity in advance of March 31, 2022.

On January 13, 2021, the Bankruptcy Court entered an order authorizing the Debtors to enter into a Canadian fleet financing facility up to CAD$400 million. On January 27, 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A which provides for aggregate maximum borrowings of CAD$350 million on a revolving basis. Subject to initial availability, the initial draw of CAD$120 million was used to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest.

On January 20, 2021, the Bankruptcy Court authorized an extension (the "Second Lease Order") of the July 24, 2020 order related to the Company's Amended and Restated Master Motor Vehicle Operating and Servicing Agreement (Series 2013 G1) (the "Operating Lease"), which extends the forbearance period related to Operating Lease to September 30, 2021, provided that the Debtors dispose of 121,510 lease vehicles, at least 113,381 of which will be non-program vehicles, and reach a minimum cumulative vehicle disposition proceeds of $2.0 billion by September 30, 2021. Additionally, the Second Lease Order directed the Debtors to (i) have no more than 157,262 lease vehicles by September 30, 2021 and (ii) make $756 million of base rent payments under the Operating Lease to the Hertz Vehicle Financing ("HVF") trustee in the amount of 9 equal monthly payments of $84 million commencing in the period January 2021 through September 2021. Of the 121,510 lease vehicles that the Debtors are obligated to dispose of, as of March 31, 2021 the Debtors have disposed approximately 14,000 lease vehicles, of which 9,000 were non-program vehicles.

In the first quarter of 2021, the Bankruptcy Court authorized the rejection of certain unexpired leases (the "Lease Rejection Orders") comprised of 278 off airport and 26 airport locations in the Company's U.S. RAC segment. See Note 7, "Leases," for further details.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

On April 15, 2021, the Company obtained commitments with respect to a senior secured revolving credit facility in an aggregate committed amount of up to $1.5 billion and a senior term loan facility in an aggregate principal amount of $1.3 billion. See Note 6, "Debt," for additional information.

~~Going Concern~~

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is contingent upon its ability to successfully implement a plan of reorganization, among other factors, and the realization of assets and the satisfaction of liabilities are subject to uncertainty. Further, any plan of reorganization could materially change the amounts of assets and liabilities reported in the accompanying unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern or as a consequence of the Chapter 11 Cases. As a result of the Company's financial condition, defaults under certain debt agreements as disclosed in Note 6, "Debt," and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists that the Company will be able to continue as a going concern for one year from the issuance date of this Quarterly Report on Form 10-Q.

Note 2—Basis of Presentation ~~and Recently Issued Accounting Pronouncements~~

Basis of Presentation

This Quarterly Report on Form 10-Q combines the quarterly reports on Form 10-Q for the quarterly period ended March 31, ~~2021~~2022 of Hertz Global and Hertz. Hertz Global consolidates Hertz for financial statement purposes, therefore, disclosures that relate to activities of Hertz also apply to Hertz Global. In the sections that combine disclosure of Hertz Global and Hertz, this report refers to actions as being actions of the Company, or Hertz Global, which is appropriate because the business is one enterprise and Hertz Global operates the business through Hertz. When appropriate, Hertz Global and Hertz are named specifically for their individual disclosures and any significant differences between the operations and results of Hertz Global and Hertz are separately disclosed and explained.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The Company's vehicle rental operations are typically a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months for the majority of countries where the Company generates revenues.

~~Effective on the Petition Date, the Company applied accounting standards applicable to reorganizations, Accounting Standards Codification 852 -~~ ~~Reorganizations,~~ in preparing the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020 and the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2021 which requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, Pre-petition obligations of the Debtors that may be impacted by the Chapter 11 Cases have been classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020. These liabilities are reported at the amounts the Company anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts. See Note 15, "Liabilities Subject to Compromise," for additional information. In addition, certainCertain charges related to the Chapter 11 Cases ~~are~~were recorded as reorganization items, net in the accompanying unaudited condensed consolidated ~~statements~~statement of operations for the three months ended March 31, ~~2021.~~2021 pursuant to the provisions of Accounting Standards Codification (“ASC”) 852, Reorganizations. See Note ~~16,~~15, "Reorganization Items, Net," for additional information.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates.

The December 31, ~~2020~~2021 unaudited condensed consolidated balance sheet data is derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP. The information included in this

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Quarterly Report on Form 10-Q should be read in conjunction with information included in the Company's Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") on February ~~26, 2021.~~23, 2022.

In connection with the Company's emergence from Chapter 11 and how the Company's chief operating decision maker ("CODM") regularly reviews operating results and allocates resources, the Company modified its reportable segments during the second quarter of 2021, as disclosed in Note 14, "Segment Information." Additionally, beginning in second quarter 2021, non-vehicle depreciation expense is reported on a separate line item in the consolidated statement of operations. Certain prior period amounts have been reclassified to conform with current period presentation.

Principles of Consolidation

The unaudited condensed consolidated financial statements of Hertz Global include the accounts of Hertz Global, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The unaudited condensed consolidated financial statements of Hertz include the accounts of Hertz, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The Company consolidates a VIE when it is deemed the primary beneficiary of the VIE. The Company accounts for its investment in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary of the joint venture. All significant intercompany transactions have been eliminated in consolidation.

~~Recently Issued Accounting Pronouncements~~

~~Not Yet Adopted~~

~~Scope of Reference Rate Reform~~

In January 2021, the Financial Accounting Standards Board ("FASB") issued guidance that clarifies that entities with derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment due to reference rate reform may elect to apply certain optional expedients and exceptions, including contract modification relief, provided in Topic 848. Entities may elect to apply the guidance on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 or (2) prospectively to new modifications from any date in an interim period that includes or is after January 7, 2021, up to the date that financial statements are available to be issued. The Company is in the process of assessing the available expedients and exceptions and, if applicable, the method and timing of adoption.

Note 3—Divestitures

Donlen Sale

On March 30, 2021, the Company completed the ~~previously announced~~sale of substantially all of the assets and certain liabilities of its Donlen ~~Sale. The~~subsidiary. In the three months ended March 31, 2021, the Company recognized a pre-tax gain in its corporate operations of $392 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $891 million less $543 million net book value of assets sold plus a $45 million receivable in connection with the sale recorded in prepaid expenses and other assets in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2021. The proceeds from the sale are subject to certain post-closing adjustments ~~based on the level of assumed indebtedness, working capital and fleet equity which the Company expects to be finalized during~~in the second quarter of 2021. ~~On March 30, 2021, the Company and the buyer entered into a transition services agreement which provides for certain transitional services in connection with the Donlen Sale.~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~Sale of Non-vehicle Capital Assets~~

During the first quarter of 2020, the Company received additional cash from the sale of certain non-vehicle capital assets in its U.S. Rental Car segment, which was completed in the fourth quarter of 2019, and recognized an additional $20 million pre-tax gain on the sale, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the three months ended March 31, 2020.

~~Sale of Marketable Securities~~

During the first quarter of 2020, the Company sold marketable securities for $74 million and recognized an immaterial gain on the sale in its corporate operations, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the three months ended March 31, 2020.

Note 4—Revenue Earning Vehicles

The components of revenue earning vehicles, net are as follows:

(In millions) March 31,
2021 December 31,
2020
Revenue earning vehicles $ 7,800 $ 7,492
Less accumulated depreciation (1,520) (1,467)
6,280 6,025
Revenue earning vehicles held for sale, net(1)
80 37
Revenue earning vehicles, net $ 6,360 $ 6,062



(In millions)	March 31, 2022		December 31, 2021
Revenue earning vehicles	$	11,624	$	10,506
Less accumulated depreciation	(1,437)		(1,518)
	10,187		8,988
Revenue earning vehicles held for sale, net(1)	377		238
Revenue earning vehicles, net	$	10,564	$	9,226

(1) Represents the carrying amount of vehicles currently placed on the Company's retail lots for sale or actively in the process of being sold through other disposition channels.

~~Note 5—Goodwill and Intangible Assets, Net~~

~~Recoverability of Goodwill and Indefinite-lived Intangible Assets~~

As of March 31, 2021, the Company quantitatively tested the recoverability of its goodwill and indefinite-lived intangible assets in the International RAC segment due to continued adverse impacts from COVID-19 and the Company's reduction in cash flow projections. The quantitative fair value test utilized the Company's most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 1% and a range of discount rates between 13% and 15%. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million. As a result of the foregoing considerations, along with the consideration of other indicators noted in Accounting Standards Codification 350 – Intangibles, Goodwill and Other (“ASC 350”), the Company concluded there were no indicators of impairment triggered for the U.S. RAC segment in the first quarter of 2021.

Further deterioration in the general economic conditions in the travel industry, the Company’s cash flows and the Company's ability to obtain future financing to maintain its fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. The Company will continue to closely monitor actual results versus its expectations as well as any significant changes in the Company's expected timing of emergence from bankruptcy, market events or conditions, including the impact of COVID-19 on the Company's business and the travel industry, and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital. If the Company's expectations of the operating results, both in magnitude or

2015

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~timing, do not materialize, or if its weighted average cost~~Depreciation of ~~capital increases,~~revenue earning vehicles and lease charges, net includes the ~~Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.~~following:


	Three Months Ended March 31,
(In millions)	2022		2021
Depreciation of revenue earning vehicles	$	322	$	265
(Gain) loss on disposal of revenue earning vehicles	(387)		(33)
Rents paid for vehicles leased	6		11
Depreciation of revenue earning vehicles and lease charges, net	$	(59)	$	243

Note 6—5—Debt

The Company's debt, including its available credit facilities, consists of the following ($ in millions): as of March 31, 2022 and December 31, 2021:

Facility Weighted-Average Interest Rate
as of
March 31, 2021 Fixed or
Floating
Interest
Rate Maturity March 31,
2021 December 31,
2020
Non-Vehicle Debt
Senior Secured Superpriority Debtor-in-Possession Credit Agreement 8.25% Floating 12/2021 $ 750 $ 250
Other Non-Vehicle Debt 8.25% Fixed Various 16 18
Unamortized Debt Issuance Costs and Net (Discount) Premium (26) (25)
Total Non-Vehicle Debt Not Subject to Compromise 740 243
Non-Vehicle Debt Subject to Compromise
Senior Term Loan 3.50% Floating 6/2023 656 656
Senior RCF 3.38% Floating 6/2021 615 615
Senior Notes(1)
6.11% Fixed 10/2022-1/2028 2,700 2,700
Senior Second Priority Secured Notes 7.63% Fixed 6/2022 350 350
Promissory Notes 7.00% Fixed 1/2028 27 27
Alternative Letter of Credit Facility(2)
5.25% Floating 11/2023 142 114
Senior RCF Letter of Credit Facility 5.50% Floating 6/2021 34 17
Letter of Credit Facility 5.50% Floating 6/2021 23 0
Unamortized Debt Issuance Costs and Net (Discount) Premium (36) (36)
Total Non-Vehicle Debt Subject to Compromise 4,511 4,443
Vehicle Debt
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(3)(4)
3.41% Floating 3/2022 1,665 1,940
1,665 1,940
HVF II U.S. Vehicle Medium Term Notes
HVF II Series 2015-3(4)
3.78% Fixed 9/2020 144 163
HVF II Series 2016-2(4)
4.12% Fixed 3/2021 232 263
HVF II Series 2016-4(4)
3.78% Fixed 7/2021 165 187
HVF II Series 2017-1(4)
4.03% Fixed 10/2020 176 199
HVF II Series 2017-2(4)
4.45% Fixed 10/2022 145 164
HVF II Series 2018-1(4)
3.93% Fixed 2/2023 414 468
HVF II Series 2018-2(4)
4.40% Fixed 6/2021 84 94
HVF II Series 2018-3(4)
4.69% Fixed 7/2023 84 95



Facility	Weighted-Average Interest Rate as of March 31, 2022	Fixed or Floating Interest Rate	Maturity	March 31, 2022		December 31, 2021
Non-Vehicle Debt
Term B Loan	3.75%	Floating	6/2028	$	1,290	$	1,294
Term C Loan	3.75%	Floating	6/2028	245		245
Senior Notes Due 2026	4.63%	Fixed	12/2026	500		500
Senior Notes Due 2029	5.00%	Fixed	12/2029	1,000		1,000
First Lien RCF	N/A	Floating	6/2026	—		—
Other Non-Vehicle Debt(1)	7.98%	Fixed	Various	15		16
Unamortized Debt Issuance Costs and Net (Discount) Premium				(66)		(69)
Total Non-Vehicle Debt				2,984		2,986
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A Class A(2)	1.77%	Floating	6/2023	1,423		2,813
HVF III Series 2021-A Class B(2)	3.65%	Fixed	6/2023	188		188
				1,611		3,001
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(2)	1.66%	Fixed	12/2024	2,000		2,000
HVF III Series 2021-2(2)	2.12%	Fixed	12/2026	2,000		2,000
HVF III Series 2022-1(2)	2.07%	Fixed	6/2025	653		—
HVF III Series 2022-2(2)	2.42%	Fixed	6/2027	653		—
HVF III Series 2022-3(2)	3.53%	Fixed	3/2024	333		—
HVF III Series 2022-4(2)	3.87%	Fixed	9/2025	580		—
HVF III Series 2022-5(2)	4.03%	Fixed	9/2027	317		—
				6,536		4,000
Vehicle Debt - Other
European ABS(2)	1.80%	Floating	10/2023	418		395
Hertz Canadian Securitization(2)	2.85%	Floating	1/2023	216		191
Australian Securitization(2)	1.67%	Floating	4/2024	135		128

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Facility Weighted-Average Interest Rate
as of
March 31, 2021 Fixed or
Floating
Interest
Rate Maturity March 31,
2021 December 31,
2020
HVF II Series 2019-1(4)
4.45% Fixed 3/2022 292 330
HVF II Series 2019-2(4)
4.05% Fixed 5/2024 313 354
HVF II Series 2019-3(4)
3.30% Fixed 12/2024 311 352
2,360 2,669
HVIF U.S. Fleet Medium Term Notes:
HVIF Series 2020-1 3.53% Fixed 11/2021 881 0
881 0
Vehicle Debt - Other
European Vehicle Notes(5)
5.07% Fixed 10/2021-3/2023 853 888
European ABS(4)
1.60% Floating 11/2021 212 263
Hertz Canadian Securitization(4)
2.44% Floating 1/2023 95 53
Australian Securitization(4)
1.66% Floating 6/2021 99 97
New Zealand RCF 2.95% Floating 6/2021 31 35
U.K. Financing Facility 3.03% Floating 4/2021-2/2024 91 105
Other Vehicle Debt 3.35% Floating 4/2021-11/2024 53 37
1,434 1,478
Unamortized Debt Issuance Costs and Net (Discount) Premium (54) (63)
Total Vehicle Debt Not Subject to Compromise 6,286 6,024
Total Debt Not Subject to Compromise $ 7,026 $ 6,267



Facility	Weighted-Average Interest Rate as of March 31, 2022	Fixed or Floating Interest Rate	Maturity	March 31, 2022		December 31, 2021
New Zealand RCF	3.94%	Floating	6/2022	42		39
U.K. Financing Facility	4.25%	Floating	4/2022-3/2025	90		98
U.K. Toyota Financing Facility	2.20%	Floating	8/2022-2/2023	8		9
Other Vehicle Debt	2.90%	Floating	4/2022-3/2025	94		93
				1,003		953
Unamortized Debt Issuance Costs and Net (Discount) Premium				(52)		(33)
Total Vehicle Debt				9,098		7,921
Total Debt				$	12,082	$	10,907

(1)~~References to the "Senior Notes" include the series~~Other non-vehicle debt is primarily comprised of ~~Hertz's unsecured senior notes set forth~~$11 million and $12 million in ~~the table below which are included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets~~capital lease obligations as of March 31, ~~2021~~2022 and December 31, ~~2020. Outstanding principal amounts for each such series of the Senior Notes is also specified below:~~2021, respectively.

(In millions) Outstanding Principal
Senior Notes March 31, 2021 December 31, 2020
6.250% Senior Notes due October 2022 $ 500 $ 500
5.500% Senior Notes due October 2024 800 800
7.125% Senior Notes due August 2026 500 500
6.000% Senior Notes due January 2028 900 900
$ 2,700 $ 2,700

(2)~~Includes default interest.~~

~~(3)Includes default interest which is comprised of an increase in the contractual spread.~~

~~(4)~~Maturity reference is to the earlier "expected final maturity date" as opposed to the subsequent "legal final maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness originally ~~expected~~expect the outstanding principal of the relevant indebtedness to be repaid in full. The legal final maturity date is the date on which the outstanding principal of the relevant indebtedness is legally due and payable in full. ~~While~~

Non-vehicle Debt

In March 2022, the First Lien RCF was amended to (i) increase the aggregate committed amount from $1.3 billion to $1.5 billion, (ii) increase the sublimit for letters of credit from $1.1 billion to $1.4 billion and (iii) change the benchmark from USD LIBOR to the Secured Overnight Financing Rate ("SOFR") based rate.

Vehicle Debt

HVF ~~II remains~~III U.S. ABS Program

HVF III Series 2021-A Notes: In March 2022, the Series 2021-A Notes were amended to increase the maximum principal amount from $3.0 billion to $3.2 billion.

HVF III Series 2022-1 Notes: In January 2022, Hertz issued the Series 2022-1 Notes in four classes (Class A, Class B, Class C and Class D) in an ~~amortization event, as described below,~~aggregate principal amount of $750 million.

HVF III Series 2022-2 Notes: In January 2022, Hertz issued the ~~expected maturity will deviate from its stated, contractual maturity date during amortization as payoff~~Series 2022-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $750 million.

HVF III Series 2022-3 Notes: In March 2022, Hertz issued the Series 2022-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $383 million.

HVF III Series 2022-4 Notes: In March 2022, Hertz issued the Series 2022-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $667 million.

HVF III Series 2022-5 Notes: In March 2022, Hertz issued the Series 2022-5 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $364 million.

There is subordination within each of the preceding series based on the sale of the underlying vehicles and the pro-rata application of those proceeds across all outstanding HVF II Series of Notes in accordance with their seniority. During the amortization event, the ultimate maturity of the notes will depend upon the length of time the underlying vehicle collateral is sold or the timing of the refinancing of the notes.class.

2217

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~(5)~~HVF III Various Series 2022 Class D Notes:~~References to~~ At the ~~"European Vehicle Notes" include the series of Hertz Holdings Netherlands B.V.'s, an indirect wholly-owned subsidiary of Hertz organized under the laws~~time of the ~~Netherlands, ("Hertz Netherlands") unsecured senior notes (converted from Euros to U.S. Dollars at a rate~~respective HVF III initial offerings disclosed above, an affiliate of ~~1.18 to 1 and 1.22 to 1~~HVF III purchased the Class D Notes. Accordingly, the related principal amounts below are eliminated in consolidation as of March 31, ~~2021 and December 31, 2020, respectively), set forth in the table below. Outstanding principal amounts for each such series of the European Vehicle Notes is also specified below:~~2022.

(In millions) Outstanding Principal
European Vehicle Notes March 31, 2021 December 31, 2020
4.125% Senior Notes due October 2021 $ 265 $ 276
5.500% Senior Notes due March 2023 588 612
$ 853 $ 888

~~Chapter 11~~

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company reclassified certain of its non-vehicle debt instruments, net of deferred financing costs, discounts and premiums, as applicable, to liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2021, and December 31, 2020. The Company has suspended accruing and paying interest and amortizing deferred financing costs, discounts and premiums, as applicable, on the Senior Notes, Promissory Notes and Alternative Letter of Credit Facility, as of the Petition Date. The Company is continuing to pay in cash an amount equal to the monthly interest at the non-default rate for the Senior Term Loan and Senior RCF (collectively, "the First Lien Facilities"), and has suspended amortizing the associated deferred financing costs, discounts and premiums for the First Lien Facilities, as applicable, as of the Petition Date. Additionally, the Company is continuing to pay half of the interest at the non-default rate for the Senior Second Priority Secured Notes with the remaining half paid in kind.

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility. Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited, Hertz Netherlands and the direct and indirect subsidiary companies located outside of the United States and Canada (collectively the "International Subsidiaries") (some of which were waived or amended, subject to certain time limitations, and (ii) HVF, HVF II and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

As disclosed in Note 1, "Background," based on the Proposed Plan, the Disclosure Statement and commitments received by the Company in April 2021, all of which are subject to approval by the Bankruptcy Court and certain other conditions, events related to the Company's debt are as follows:

•Upon exit from Chapter 11, which is currently anticipated to occur in June 2021, the Debtors anticipate eliminating approximately $5.0 billion of existing debt and eliminating the €725 million European Vehicle Notes where the holders' guaranty claims against the Debtors' U.S. entities will be unimpaired as the balance of their debt is expected to be paid by the issuer, Hertz Holdings Netherlands BV.

•The Company anticipates obtaining a new secured rental car asset-backed credit facility (the “ABS Facility”) in an aggregate amount of $7.0 billion, comprised of a secured rental car asset-backed variable funding note in the aggregate amount of $3.0 billion and a secured rental car asset-backed bridge financing facility in an aggregate amount of up to $4.0 billion. Certain of the proceeds of the ABS Facility are expected to be used to repay outstanding vehicle financing facilities and to support the Company’s fleet financing needs for its U.S. rental car operations.

•The Company also anticipates obtaining new exit credit facilities (the "Exit Credit Facilities") in an aggregate amount of $2.8 billion comprised of a senior secured revolving credit facility in an aggregate committed amount of $1.5 billion plus a senior secured term loan facility in an aggregate principal amount of $1.3 billion. The Exit Credit Facilities will be secured by a first lien of substantially all assets owned as of the date of execution of the Exit Credit Facilities or acquired thereafter.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~Non-Vehicle Debt~~

~~Senior Secured Superpriority Debtor-in-Possession Credit Agreement ("DIP Credit Agreement")~~

The DIP Facility matures on December 31, 2021 and has limited covenants and events of default, including one milestone requiring the filing of a plan of reorganization by August 1, 2021. On April 21, 2021, the Company received approval of its Proposed Plan and related Disclosure Statement, as further disclosed in Note 1, "Background."

~~Vehicle Debt~~

~~HVF II U.S. ABS Program~~

On January 20, 2021, the Bankruptcy Court entered the Second Lease Order, which directed the Debtors, among other things, to make $756 million of base rent payments under the Operating Lease to the HVF trustee in the amount of 9 equal monthly payments of $84 million commencing in January 2021 through September 2021. The parties have agreed to defer litigation related to the Operating Lease until September 30, 2021. HVF II is accruing default interest on the HVF II Variable Funding Notes and accruing non-default interest on the U.S. Vehicle Medium Term Notes. Non-default interest is being paid on the HVF II Variable Funding Notes and the U.S. Vehicle Medium Term Notes from funds drawn on existing letter of credit facilities, as described below.


(In millions)	Aggregate Principal Amount

HVF III Series 2022-1 Class D Notes	$	98
HVF III Series 2022-2 Class D Notes	98
HVF III Series 2022-3 Class D Notes	50
HVF III Series 2022-4 Class D Notes	87
HVF III Series 2022-5 Class D Notes	47
Total	$	380

Vehicle Debt-Other

~~European Vehicle Notes~~Australian Securitization

~~Hertz Netherlands and certain other international subsidiaries entered into a limited forbearance and lock-up agreement (the “Lock-up Agreement”), as extended, in respect of~~In January 2022, the ~~European Vehicle Notes pursuant~~Australian Securitization was amended to ~~which~~increase the majority noteholders agreed not to take action in respect of any default or event of default that could have resulted from the Chapter 11 Cases, in order to support a transaction set-forth in the Lock-up Agreement, and to be implemented by a scheme of arrangement (subject to conditions and approvals), subsequent to the waiver expiration on December 31, 2020. The transaction set out in the Lock-up Agreement was superseded by positive developments in the Chapter 11 Cases in April 2021 in which the Proposed Plan will both fully repay the European Vehicle Notes and also provide the necessary liquidity for the European business. On April 23, 2021, Hertz International Limited entered into a multi-draw term loan facility (the "HIL Credit Agreement") which provides an aggregate maximum principal of €250 million to meet the liquidity requirements of the European business. As a result, the Lock-Up Agreement has been terminated and the scheme arrangement has been cancelled.

~~European ABS~~

An amortization event, that would have arisen under the European ABS as a result of filing the Chapter 11 Cases, was waived in May 2020 (as amended from time to time) and, in April 2021, such waivers have been superseded by a comprehensive restructuring of the European ABS. The terms of the restructured European ABS provide for aggregate maximum borrowings ~~of €450~~to AUD250 million and to extend the maturity to April 2022 and, in respect of the guarantees given by Hertz relating to these facilities, the terms of the restructuring also acknowledge that the Proposed Plan will provide for a complete release of any contingent claims.2024.

~~Hertz Canadian Securitization~~New Zealand RCF

~~On January 13, 2021,~~In April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to extend the ~~Bankruptcy Court entered an order authorizing the Debtors~~maturity to enter into a new series under the Hertz Canadian Securitization, Funding LP Series 2021-A Notes. On January 27, 2021, Funding LP entered into aggregate maximum borrowings of CAD$350 million on a revolving basis, subject to availability under the borrowing base limitation. The initial draw was used, in part, to pay outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest. As a result of the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

June 2024.

U.K. Financing Facility

~~Events of default that would have arisen under~~In April 2022, Hertz U.K. Limited amended the U.K. Financing Facility ~~as a result of filing the Chapter 11 Cases were waived in May 2020 (as amended from time~~ to ~~time), and, in April 2021, such waivers have been superseded by a comprehensive restructuring of the U.K. Financing Facility. The terms of the restructured U.K. Financing Facility~~ provide for aggregate maximum borrowings of up to £120 million, for a seasonal commitment period through October 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to £100 ~~million and~~million. Additionally, the U.K. Financing Facility was amended to extend the maturity ~~to April 2022 and, in respect~~ of the ~~guarantees given by Hertz relating~~aggregate maximum borrowings of £100 million to ~~these facilities, the terms of the restructuring also acknowledge that the Proposed Plan will provide for a complete release of any contingent claims.~~October 2023.

U.K. Toyota Financing Facility

In March 2022, Hertz U.K. Limited amended the U.K. Toyota Financing Facility to increase aggregate maximum borrowings from £10 million to £25 million and extended the maturity to October 2022.

Borrowing Capacity and Availability

Borrowing capacity and availability comes from the Company's revolving credit ~~facilities. As a result of the filing of the Chapter 11 Cases, almost all of the Company's revolving credit~~ facilities, ~~were terminated, as disclosed in the following table. The remaining revolving credit facilities~~which are a combination of ~~cash-flow-based~~variable funding asset-backed securitization facilities, cash-flow based revolving credit facilities, asset-based revolving credit facilities and ~~asset-based revolving credit facilities.~~the First Lien RCF. Creditors under each such asset-backed securitization facility and asset-based revolving credit facility have a claim on a specific pool of assets as collateral. With respect to each such asset-backed securitization facility and asset-based revolving credit facility, the Company refers to the amount of debt it can borrow given a certain pool of assets as the borrowing base.

The Company refers to "Remaining Capacity" as the maximum principal amount of debt permitted to be outstanding under the respective facility (i.e., with respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the amount of debt the Company could borrow assuming it possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under such ~~facility.~~facility and, in the case of the First Lien RCF, less any issued standby letters of credit. With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Base Limitation" as the lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding under such facility (i.e., the amount of debt that can be borrowed given the collateral possessed at such time).

The following facilities were available to the Company as of March 31, ~~2021~~2022 and are presented net of any outstanding letters of credit:

(In millions) Remaining
Capacity Availability Under
Borrowing Base
Limitation
Non-Vehicle Debt
Senior RCF(1)
$ 0 $ 0
Senior Secured Superpriority Debtor-in-Possession Credit Agreement 900 900
Letter of Credit Facility(1)
0 0
Alternative Letter of Credit Facility(1)
0 0
Total Non-Vehicle Debt 900 900
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes(1)
0 0
HVIF Series 2020-1 3,119 35
European ABS 494 4
Hertz Canadian Securitization 183 0
Australian Securitization 62 4
U.K. Financing Facility 19 0
New Zealand RCF 21 0
Total Vehicle Debt 3,898 43
Total $ 4,798 $ 943

~~(1) As a result of the filing of the Chapter 11 Cases, there is no longer remaining capacity or availability under these facilities, as such unused commitments were terminated.~~

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~



(In millions)	Remaining Capacity		Availability Under Borrowing Base Limitation
Non-Vehicle Debt


First Lien RCF	$	1,138	$	1,138
Total Non-Vehicle Debt	1,138		1,138
Vehicle Debt
HVF III Series 2021-A	1,595		—

European ABS	413		—
Hertz Canadian Securitization	64		—
Australian Securitization	53		—

U.K. Financing Facility	41		—
U.K. Toyota Financing Facility	25		6
Total Vehicle Debt	2,191		6
Total	$	3,329	$	1,144

Letters of Credit

As of March 31, ~~2021,~~2022, there were outstanding standby letters of credit totaling ~~$688 million.~~$585 million comprised primarily of $232 million issued under the Term C Loan and $337 million were issued under the First Lien RCF. As of March 31, 2022, there remains $13 million of capacity to issue letters of credit under the Term C Loan. Such letters of credit have been issued primarily to support the Company's insurance programs ~~vehicle rental concessions~~ and ~~leaseholds as well as~~ to provide credit enhancement for ~~its~~the Company's asset-backed securitization ~~facilities. Of this amount, $278 million were issued under~~facilities, as well as to support the ~~Letter of Credit Facility, $194 million were issued under the Senior RCF~~Company's vehicle rental concessions and ~~$200 million were issued under the Alternative Letter of Credit Facility.~~leaseholds. As of March 31, ~~2021, $142 million, $34 million and $23 million~~2022, none of the issued letters of credit have been drawn upon under the Alternative Letter of Credit Facility, Senior RCF and Letter of Credit Facility, respectively, to primarily fund interest payments due under the HVF II Notes and concession payments. The draws remain unreimbursed by the Company, and, except as otherwise set forth in orders from the Bankruptcy Court, the interest on the Senior RCF and Letter of Credit Facility draws are being paid on a monthly basis at a non-default rate, and interest on the Alternative Letter of Credit Facility draws are not being paid or accrued.upon.

~~Special Purpose Entities~~Pledges Related to Vehicle Financing

Substantially all of the Company's revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings ~~and~~or asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing ~~II LP, HVF II GP Corp., Hertz Vehicle Interim Financing LLC, Hertz Vehicle Financing LLC, Rental Car Finance~~III LLC and various other domestic and international subsidiaries that facilitate the Company's international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

The Company has a 25% ownership interest in IFF No. 2, whose sole purpose is to provide commitments to lend under the European ABS in various currencies subject to borrowing bases comprised of revenue earning vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries. IFF No. 2 is a VIE and the Company is the primary beneficiary; therefore, the assets, liabilities and results of operations of IFF No. 2 are included in the accompanying unaudited condensed consolidated financial statements. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, IFF No. 2 had total assets of ~~$393~~$706 million and ~~$464~~$734 million, respectively, comprised primarily ~~comprised~~ of ~~loans receivable,~~intercompany receivables, and total liabilities of ~~$393~~$706 million and ~~$464~~$733 million, respectively, comprised primarily ~~comprised~~ of debt.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Covenant Compliance

Prior to the filing of the Chapter 11 Cases, Hertz’s consolidated first lien net leverage ratio (the "Leverage Ratio"), as defined in the credit agreements governing the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, as of the last day of any fiscal quarter may not exceed a ratio of 3.00 to 1.00. As a result of the filing of the Chapter 11 Cases, the Company is currently in default under its Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, and the Company is in breach of the Leverage Ratio.

The ~~DIP~~First Lien Credit Agreement requires Hertz to comply with the following financial covenant: a ~~liquidity maintenance test~~First Lien Ratio of ~~$275 million, as defined~~less than or equal to 3.00 to 1.00 in the ~~DIP Credit Agreement, as~~first and last quarters of ~~each month end period.~~the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year. The financial covenant disclosed above was effective beginning in the third quarter of 2021. As of March 31, ~~2021,~~2022, Hertz was in compliance with the ~~liquidity~~First Lien Ratio.

In addition to financial covenants, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, conduct of business, maintenance ~~test.~~of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, restrictions on the incurrence of liens, indebtedness, asset dispositions and restricted payments. As of March 31, 2022, the Company was in compliance with all covenants in the First Lien Credit Agreement.

Note 7—6—Leases

The Company enters into certain agreements as a lessor under which it rents vehicles and leases fleets to customers.

The Company's operating leases for vehicle rentals have rental periods that are typically short term (e.g., daily or weekly) and can generally be extended for up to one month or terminated at the customer's discretion. Rental charges are computed on a limited or unlimited mileage rate, or on a time rate plus a mileage charge. In connection with the vehicle rental, the Company offers supplemental equipment rentals (e.g., child seats and ski racks) which

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are deemed lease components. The Company also offers value-added services in connection with the vehicle rental, which are deemed non-lease components, such as loss or collision damage waiver, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and satellite radio. Additionally, the Company charges for variable services primarily consisting of tolls and refueling charges incurred during the rental period, and for fees associated with the early or late termination of the vehicle lease. The Company mitigates residual value risk of its revenue earning vehicles by utilizing manufacturer repurchase and guaranteed depreciation programs, using sophisticated vehicle diagnostic and repair equipment to maintain the condition of its vehicles and through periodic reviews of vehicle depreciation rates based on management's ongoing assessment of present and estimated future market conditions.

Prior to the Donlen Sale on March 30, 2021, as further disclosed in Note 3, "Divestitures," the Company had operating leases for fleets as part of its Donlen business which had lease periods that were typically for twelve months, after which the lease converted to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter. These leases contained terminal rental adjustment clauses which were considered variable charges.

As a result of the continuing impact from COVID-19 as disclosed in Note 1, "Background," the Company received rent concessions in the form of abatements of fixed and variable rent payments for certain of its airport and off airport locations in the amount of approximately $100 million during the three months ended March 31, 2021, which substantially represents amounts previously due in the period between January 1, 2021 and March 31, 2021. The Company elected to apply the accounting relief provided by the FASB and elected to not evaluate whether the concession is a modification. The Company will account for the concession as if it were part of the existing contract.

~~In the first quarter of 2021, the Bankruptcy Court entered the Lease Rejection Orders which applied, in the aggregate, to 278 off airport and 26 airport locations in the Company's U.S. RAC segment.~~

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying unaudited condensed consolidated statements of operations:


		Three Months Ended March 31,				Three Months Ended March 31,
(In millions)	(In millions)	2021		2020			(In millions)	2022		2021
Operating lease income from vehicle rentals	Operating lease income from vehicle rentals	$	1,099	$	1,637		Operating lease income from vehicle rentals	$	1,721	$	1,099
Operating lease income from fleet leasing	Operating lease income from fleet leasing	149		169			Operating lease income from fleet leasing	—		149
Variable operating lease income	Variable operating lease income	1		33			Variable operating lease income	44		1
Revenue accounted for under Topic 842	Revenue accounted for under Topic 842	1,249		1,839			Revenue accounted for under Topic 842	1,765		1,249
Revenue accounted for under Topic 606	Revenue accounted for under Topic 606	40		84			Revenue accounted for under Topic 606	45		40
Total revenues	Total revenues	$	1,289	$	1,923		Total revenues	$	1,810	$	1,289

Note ~~8—Restructuring~~

~~Europe Restructuring~~

Due to the continued impact from COVID-19 as disclosed in Note 1, "Background," and recent reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment, primarily Ireland, affecting 150 employees. The Company accrued charges of $7 million for termination benefits at March 31, 2021, which were recorded in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statement of operations for three months ended March 31, 2021. The program is expected to be completed within the next twelve months.

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~~Unaudited~~

~~Note 9—~~7—Income Tax (Provision) Benefit

On March 27, 2020, the U.S. federal government passed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The CARES Act contains many tax provisions including, but not limited to, accelerated alternative minimum tax ("AMT") refunds, payroll tax payment deferrals, employee retention credits, temporary enhanced net operating loss ("NOL") utilization rules and a temporary increase to the interest deduction limitation. The Company has considered the income tax provisions of the CARES Act in the tax benefit calculations for the three months ended March 31, 2021 and 2020 as well the amounts reported for income taxes on the unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020. The Company continues to monitor global legislation issued in response to COVID-19.

Hertz Global

The effective tax rate is ~~29%~~23% and 1%29% for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. The effective tax rate is impacted and differs from the U.S. federal statutory rate of 21% as a result of the level and mix of earnings among tax jurisdiction and valuation allowances in certain jurisdictions.

Hertz Global recorded a tax provision of $130 million and $79 million for the three months ended March 31, 2022 and 2021, ~~compared to a~~respectively. The increase in the tax ~~benefit of $4 million~~provision for ~~the~~ three months ended March 31, ~~2020. The tax provision for the three months ended March 31, 2021~~2022 compared to the 2021 period is driven primarily by improvements in Hertz Global's financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit ~~for the 2020 period is primarily due to the gain on the Donlen Sale as disclosed in Note 3, "Divestitures."~~can be recognized.

As of March 31, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on European restructuring qualifies as an ordinary loss. During the first quarter of 2022, the Company received notice from the IRS of its acceptance of this request. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

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Hertz

The effective tax rate is ~~29%~~26% and 1%29% for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. The effective tax rate is impacted and differs from the U.S. federal statutory rate of 21% as a result of the level and mix of earnings among tax jurisdiction and valuation allowances in certain jurisdictions.

Hertz recorded a tax provision of $130 million and $79 million for the three months ended March 31, 2022 and 2021, ~~compared to a~~respectively. The increase in the tax ~~benefit of $3 million for~~provision in the three months ended March 31, ~~2020. The tax benefit for the three months ended March 31, 2021~~2022 compared to the 2021, period is driven primarily by improvements in Hertz's financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized.

As of March 31, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the ~~2020 period is primarily~~IRS in December 2021, to determine whether the ~~gain~~capital loss on European restructuring qualifies as an ordinary loss. During the ~~Donlen Sale as disclosed~~first quarter of 2022, the Company received notice from the IRS of its acceptance of this request. A favorable outcome from this proceeding could result in ~~Note 3, "Divestitures."~~a full or partial release of the valuation allowance.

Note ~~10—~~8— Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global

Public Warrants

During the three months ended March 31, 2022, 145,190 Public Warrants were exercised of which 33,427 were cashless exercises and 111,763 were exercised for $13.80 per share. As of March 31, 2022, a cumulative 6,185,470 Public Warrants have been exercised since their original issuance in June 2021. The Public Warrants are recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. See Note 11, "Fair Value Measurements."

Share Repurchase Program for Common Stock

In November 2021, Hertz Global's Board of Directors approved a share repurchase program that authorizes the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock. Between January 1, 2022 and March 31, 2022, a total of 34,964,965 shares of Hertz Global's common stock were repurchased at an average share price of $20.65 resulting in an aggregate purchase price of $722 million. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of March 31, 2022. Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.

Between April 1, 2022 and April 21, 2022, a total of 3,159,382 shares of Hertz Global's common stock were repurchased at an average share price of $22.16 resulting in an aggregate purchase price of $70 million, resulting in a total of 55,230,373 shares of Hertz Global's common stock repurchased for a total of $1.2 billion since the inception of the program.

Computation of Earnings (Loss) Per Common Share

Basic earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding. Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, except when the effect would be anti-dilutive.

For the three months ended March 31, 2022, the diluted weighted-average shares outstanding included the dilutive impact of Public Warrants where the Company assumed share settlement of the Public Warrants as of the beginning of the reporting period. Additionally, the Company removes the change in fair value of Public Warrants when computing diluted earnings (loss) per common share, when the impact of Public Warrants is dilutive.

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The following table sets forth the computation of basic and diluted earnings (loss) per common share:

Three Months Ended
March 31,
(In millions, except per share data) 2021 2020
Numerator:
Net income (loss) attributable to Hertz Global $ 190 $ (356)
Denominator:
Basic weighted-average shares outstanding 156 142
Dilutive stock options, RSUs and PSUs 1 0
Diluted weighted-average shares outstanding 157 142
Antidilutive stock options, RSUs, PSUs and PSAs 1 2
Earnings (loss) per share:
Basic earnings (loss) per share $ 1.22 $ (2.50)
Diluted earnings (loss) per share $ 1.21 $ (2.50)



	Three Months Ended March 31,
(In millions, except per share data)	2022		2021
Numerator:


Net income (loss) attributable and available to Hertz Global common stockholders, basic	$	426	$	190
Change in fair value of Public Warrants	(50)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	376	$	190
Denominator:


Basic weighted-average common shares outstanding	432		156
Dilutive effect of stock options, RSUs and PSUs	—		1
Dilutive effect of Public Warrants	29		—
Diluted weighted-average shares outstanding	461		157

Antidilutive stock options, RSUs and PSUs	5		1
Total antidilutive	5		1
Earnings (loss) per common share:
Basic	$	0.99	$	1.22
Diluted	$	0.82	$	1.21

Note 9—Stock-Based Compensation

During the fourth quarter of 2021, Hertz Global's Board of Directors approved the Hertz Global Holdings, Inc. 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan"). As of March 31, 2022, 42,173,566 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan.

During the three months ended March 31, 2022, compensation expense of $27 million, net of $1 million tax benefit, was recognized for grants under the 2021 Omnibus Plan and recorded in selling, general and administrative expense in the accompany unaudited condensed consolidated income statement. As of March 31, 2022, there was $304 million of total unrecognized compensation cost expected to be recognized over the remaining 2.7 years, on a weighted average basis, of the requisite service period that began on the grant dates.

Stock Options

A summary of stock option activity as of March 31, 2022 is presented below:


Options	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	3,678,855	$	26.17	9.9	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited or Expired	(65,720)	26.17		—	—
Outstanding as of March 31, 2022	3,613,135	26.17		9.6	—
Exercisable as of March 31, 2022	(26,440)	26.17		9.6	—
Non-vested as of March 31, 2022	3,586,695

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Performance Stock Units ("PSUs")

A summary of the PSU activity as of March 31, 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	—	$	—	$	—
Granted	9,929,111	17.73		—
Vested	—	—		—
Forfeited or Expired	—	—		—
Outstanding as of March 31, 2022	9,929,111	17.73		220

Compensation expense for PSUs is based on the grant date fair value. For grants issued in 2022, vesting eligibility is based on market, performance and service conditions of three to five years. Certain of these PSUs were valued on the grant date using a Monte Carlo simulation model that incorporates the assumptions noted in the following table:


	Grants
Assumption	2022
Expected volatility	68		%
Expected dividend yield	—		%
Expected term (years)	5
Risk-free interest rate	1.71		%
Weighted-average grant date fair value	$	17.61

Restricted Stock and Restricted Stock Units ("RSUs")

A summary of RSU activity as of March 31, 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	1,726,286	$	26.17	$	43
Granted	3,354,079	20.60		—
Vested	(508,813)	26.17		—
Forfeited or Expired	(21,907)	26.17		—
Outstanding as of March 31, 2022	4,549,645	22.06		101

Additional information pertaining to RSU activity is as follows:


	Three Months Ended March 31,
	2022
Total fair value of awards that vested (in millions)	$	13
Weighted-average grant-date fair value of awards granted	$	20.60

For RSU grants issued in 2022, the vesting period is three years. For RSU grants issued in 2021, the vesting period is three years except for 500,000 shares that vested in the first quarter of 2022 and 100,000 shares which vest in the fourth quarter of 2022.

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Deferred Stock Units

As of March 31, 2022, there were approximately 35,000 outstanding shares of deferred stock units under the 2021 Omnibus Plan.

Note 10—Financial Instruments

The Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates. Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements. The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, upon the occurrence of an event of default under the Company’s International Swaps and Derivatives Association ("ISDA") master derivative agreements, the non-defaulting party generally has the right, but not the obligation, to set-off any early termination amounts under any such agreements against any other amounts owed with regard to any other agreements between the parties to each such agreement.

None of the Company's financial instruments have been designated as hedging instruments as of March 31, 2022 and December 31, 2021.

Interest Rate Risk

The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.

Currency Exchange Rate Risk

The Company uses foreign currency exchange rate derivative financial instruments to manage it currency exposure resulting from intercompany transactions and other cross currency obligations.

Fair Value

The following table summarizes the estimated fair value of financial instruments:


	Fair Value of Financial Instruments
	Asset Derivatives(1)				Liability Derivatives(1)
(In millions)	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Interest rate instruments	$	60	$	12	$	—	$	—
Foreign currency forward contracts	2		1		3		2
Total	$	62	$	13	$	3	$	2

(1) All asset derivatives are recorded in prepaid expenses and other assets and all liability derivatives are recorded in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

During the first quarter of 2022, the Company recognized a gain of $44 million on interest rate instruments which was recorded in vehicle interest expense, net in the accompanying unaudited condensed consolidated statement of operations for the three months ended March 31, 2022. The amounts recognized in income for derivative instruments were not material for the three months ended March 31, 2021.

The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with their counterparties. The Company does not offset such derivative assets and

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liabilities in its unaudited condensed consolidated balance sheets, and the potential effect of the Company’s use of the master netting arrangements is not material.

Note 11—Fair Value Measurements

~~Assets~~Under U.S. GAAP, entities are allowed to measure certain financial instruments and ~~Liabilities Measured at Fair Value on a Recurring Basis~~

~~Investments in equity securities that were measured~~other items at fair value. The Company has not elected the fair value measurement option for any of its assets or liabilities that meet the criteria for this option. Irrespective of the fair value option previously described, U.S. GAAP requires certain financial and non-financial assets and liabilities of the Company to be measured on either a recurring basis ~~consisted of marketable securities which the Company divested of in the first quarter of 2020. See Note 3, "Divestitures," for further information.~~or on a nonrecurring basis.

Fair Value Disclosures

The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

Debt Obligations

The fair value of the debt facilities is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e. Level 2 inputs).



	March 31, 2022				December 31, 2021
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt	$	3,050	$	2,921	$	3,055	$	3,065
Vehicle Debt	9,150		8,852		7,954		7,908
Total	$	12,200	$	11,773	$	11,009	$	10,973

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company's cash equivalents, restricted cash equivalents and Public Warrants that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as follows:


	March 31, 2022								December 31, 2021
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Cash equivalents and restricted cash equivalents	$	1,130	$	—	$	—	$	1,130	$	1,678	$	—	$	—	$	1,678

Liabilities:
Public Warrants	$	1,272	$	—	$	—	$	1,272	$	1,324	$	—	$	—	$	1,324

Cash Equivalents and Restricted Cash Equivalents

The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts. The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e., Level 1 inputs).

~~The following table summarizes the ending balances of the Company's cash equivalents and restricted cash equivalents:~~

March 31, 2021 December 31, 2020
(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash equivalents $ 1,567 $ 0 $ 0 $ 1,567 $ 723 $ 0 $ 0 $ 723

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~~Debt Obligations~~

The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e., Level 2 inputs).

March 31, 2021 As of December 31, 2020
(In millions) Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value
Non-Vehicle Debt(1)
$ 5,313 $ 5,316 $ 4,747 $ 3,382
Vehicle Debt 6,340 6,254 6,087 6,021
Total $ 11,653 $ 11,570 $ 10,834 $ 9,403
Public Warrants

~~(1)Includes Non-Vehicle Debt included in~~Hertz Global's Public Warrants are classified as liabilities ~~subject to compromise~~at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, ~~2021~~2022 and December 31, ~~2020.~~2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity. See Note ~~6, "Debt."~~

~~Assets~~8, "Public Warrants, Equity and ~~Liabilities Measured at Fair Value~~Earnings (Loss) Per Common Share – Hertz Global," for additional information. The Company calculates the fair value based on the end-of-day quoted market price, a ~~Non-Recurring Basis~~

~~Donlen Assets~~

~~At December 31, 2020 as a result~~Level 1 input of the ~~then impending Donlen Sale,~~fair value hierarchy. For the ~~associated assets~~three months ended March 31, 2022, the fair value adjustment was a gain of $50 million and ~~liabilities were classified as assets held for sale and liabilities held for sale, respectively,~~is recorded in change in fair value of Public Warrants in the accompanying unaudited condensed consolidated ~~balance sheet~~statement of operations for Hertz Global for the three months ended March 31, 2022.

Financial Instruments

The fair value of the Company's financial instruments as of March 31, 2022 and December 31, ~~2020~~2021 are disclosed in Note 10, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and ~~were recorded at the lower of carrying value~~liabilities and are priced using quoted market prices for similar assets or ~~fair value less any costs to sell. The Company completed the Donlen Sale~~liabilities in ~~March 2021. See Note 3, "Divestitures," for additional information.~~active markets.

Note 12—Contingencies and Off-Balance Sheet Commitments

Legal Proceedings

Self-Insured Liabilities

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company. The obligation for self-insured liabilities on self-insured U.S. and international vehicles, as stated in the accompanying unaudited condensed consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's liability recorded for self-insured liabilities is ~~$470~~$468 million and ~~$488~~$463 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions. The liability is subject to significant uncertainties. The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business, including claims by employees, ~~and~~ former employees and governmental investigations. The Company has summarized below the ~~most significant~~material legal ~~proceeding~~proceedings to which the Company was a party during the ~~period ending~~three months ended March 31, ~~2021~~2022 or the period after March 31, ~~2021,~~2022, but before the filing of this Quarterly ~~Report on Form 10-Q.~~Report.

~~In re~~Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250% Unsecured Notes due 2022 (the "2022 Notes"), (2) 5.500% Unsecured Notes due 2024 (the "2024 Notes"), (3) 7.125% Unsecured Notes due 2026 (the "2026 Notes"), and (4) 6.000% Unsecured Notes due 2028 (the "2028 Notes") issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation, Dollar Rent A Car, Inc., Dollar Thrifty Automotive Group, Inc., Donlen Corporation, DTG Operations, Inc., DTG Supply, LLC, Firefly Rent A Car LLC, Hertz Car Sales LLC, Hertz Global ~~Holdings, Inc. Securities Litigation~~ ~~- In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v.~~Services Corporation, Hertz ~~Global Holdings,~~Local Edition Corp., Hertz Local Edition Transporting, Inc., ~~et al.~~Hertz System, Inc., ~~was commenced in the U.S. District Court~~Hertz Technologies, Inc., Hertz Transporting, Inc., Rental Car Group Company, LLC, Smartz Vehicle Rental Corporation, Thrifty Car Sales, Inc., Thrifty, LLC, Thrifty

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Unaudited

Insurance Agency, Inc., Thrifty Rent A Car System, LLC, and TRAC Asia Pacific, Inc. (collectively referred to in this summary as “Defendants”). The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v. The Hertz Corporation, et al. pending in the United States Bankruptcy Court for the District of ~~New Jersey naming Old Hertz Holdings (as defined~~Delaware, Adv. Pro. No. 21-50995 (MFW). The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to payment of certain redemption premiums and post-petition interest that they assert total $271,684,720 plus interest at the contractual default rate or in the ~~Company's 2020 Form 10-K) and certain of its officers as defendants and alleging violations of~~alternative are entitled to payment post-petition interest at the ~~federal securities laws. The complaint alleged~~applicable contractual rate that ~~Old Hertz Holdings made material misrepresentations and/~~they assert totals $124,512,653 plus interest at the New York statutory rate. On July 2, 2021, Defendants were summoned to file a motion or ~~omissions of material fact in certain of its public disclosures in violation of Section 10(b) and 20(a) of~~answer to the ~~Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint sought an unspecified amount of monetary damages on behalf of~~Complaint within 30 days. On August 2, 2021, the purported class and an award of costs and expenses, including counsel fees and expert fees. The complaint, as amended, was dismissed with prejudice on April 27, 2017 and on September 20, 2018, the Third Circuit affirmed the dismissal of the complaint with prejudice. On February 5, 2019, the plaintiffsDefendants filed a motion ~~asking the federal district court~~ to ~~exercise its discretion and allow the plaintiffs to reinstate their claims to include additional allegations from the administrative order agreed to by the SEC and the Company in December 2018,~~dismiss both counts for declaratory judgment, which was ~~supplemented by reference to the Company’s subsequently filed litigation against former executives (disclosed below).~~argued before Judge Walrath on November 9, 2021. On September 30, 2019, the federal district court of New Jersey denied the plaintiffs’ motion for relief from the April 27, 2017 judgment and a related motion to allow the filing of a proposed fifth amended complaint. On October 30, 2019, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit. The parties fully briefed the appeal and oral argument had been scheduled for June 19, 2020. As a result of the Company's bankruptcy, the appeal was stayed as to the Company, but the plaintiffs advocated that the appeal could proceed against the individual defendants. On October 13, 2020, the Third Circuit affirmed the District Court’s dismissal of the plaintiffs’ motion for relief against the individual defendants since the motion was not timely filed and the appeal as to the Company remained stayed. In February 2021, the parties participated in a bankruptcy-related mediation process and arrived at a tentative settlement wherein the Company would pay a $250,000 cash settlement. In return, the plaintiffs would voluntarily dismiss all claims in the underlying action with prejudice and withdraw the plaintiffs’ Proofs of Claim with prejudice. On March 12,December 22, 2021, the Bankruptcy Court ~~approved~~dismissed Wells Fargo’s claims with respect to (i) the ~~tentative settlement~~redemption premium allegedly owed on the 2022 and 2024 Notes and (ii) post-petition interest at the ~~terms~~contract rate. As a result, only Wells Fargo’s claims for a redemption premium with respect to the 2026 and 2028 Senior Notes now remain. Additionally, note holders that elected to participate in the rights offering held in June 2021 (the "2021 Rights Offering") waived their right to collect on the make whole premium. Therefore, since some of the ~~settlement have now been fully implemented. This matter is now closed.~~2026 and 2028 note holders elected to participate in the 2021 Rights Offering, the total amount which may be owed with respect to the asserted make whole premium for those series of notes will be reduced further. The Defendants dispute that any such amounts are owed and intend to respond and otherwise vigorously defend claims set forth therein. The Company cannot predict the outcome or timing of this litigation.

There is a potential that the Bankruptcy Court's decision could be appealed and overturned. In ~~addition~~that instance, some creditors in the Chapter 11 Cases may assert that the Company owes additional interest and, in certain cases, additional make whole or other premiums. These claims could be material. The Company retains all rights with respect to any such asserted amounts and intends to vigorously defend against any such asserted claims. There can be no assurance regarding the ~~matters described above,~~outcome of any of the litigation regarding the validity or, if deemed valid, the amount of any such additional asserted interest and make whole claims and as such, the Company cannot predict the outcome or timing of any such litigation.

The Company maintains an internal compliance program through which it from time to time identifies ~~other~~ potential violations of laws and regulations applicable to the Company. When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate.

The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other than the aggregate reserve established for claims for self-insured liabilities, none of those reserves are material. For matters ~~including the matter described above,~~ where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. These matters are subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.

Other Proceedings

Litigation Against Former Executives - The Company filed litigation in the U.S. District Court for the District of New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against Scott Sider on March 28, 2019, all of whom were former executive officers of Old Hertz Holdings. The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the defendants in connection with restatements included in the Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and related accounting for prior periods. The Company is also seeking recovery for the costs of the SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December

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31, 2014 and other damages resulting from the necessity of the restatements. The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights. ~~The parties are currently involved in motion practice in the New Jersey action and discovery and depositions have commenced in the Florida action.~~ In

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October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas. In September and October 2020, the judge in the New Jersey action entered orders requiring the parties and applicable insurers to attend and participate in mediation. The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020. The mediation was unsuccessful, but settlement discussions continued and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider. ~~Depositions are continuing~~The Florida action is now closed. On December 29, 2021, the Company entered into a settlement agreement with Jeff Zimmerman, leaving Mark Frissora as the sole remaining defendant in this litigation. Fact discovery has now been completed in the New Jersey ~~action.~~action and the case will proceed to the pre-trial phase of experts’ reports and experts’ depositions. Pursuant to the agreements governing the separation of Herc Holdings from Hertz Global that occurred on June 30, 2016, Herc Holdings is entitled to 15% of the net proceeds of any repayment or recovery.

Claims Relating to Alleged False Arrests - As a large company, we are subject to various proceedings, lawsuits, disputes, inquiries, and claims arising in the ordinary course of our business. One series of claims involves claimants seeking monetary damages from the Company in connection with allegations that police detained or arrested them in error after the Company reported their rental cars as stolen. The claims arise from activities alleged to have occurred prior to the Company’s emergence from its bankruptcy reorganization. The overwhelming majority of these cases involve vehicles that were not returned to the Company within a reasonable time period following their contracted return date. These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain elected officials. The Company will continue to defend itself as appropriate and has established policies to help ensure proper treatment of its customers as well as to prosecute those involved in the theft of services or assets of the Company. We currently believe that the eventual outcome of these claims will not have a materially adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Indemnification Obligations

In the ordinary course of business, the Company has executed contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships and financial matters. Specifically, the Company has indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held responsible could be substantial. In addition, Hertz entered into customary indemnification agreements with Hertz Holdings and certain of the Company's stockholders and their affiliates pursuant to which Hertz Holdings and Hertz will indemnify those entities and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of such entities and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. The Company has entered into customary indemnification agreements with each of its directors and certain of its officers. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim. In connection with the Spin-Off, ~~(as defined in the Company's 2019 Form 10-K),~~ the Company executed an agreement with Herc Holdings that contains mutual indemnification clauses and a customary indemnification provision with respect to liability arising out of or resulting from assumed legal matters. The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable.

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Note 13—Related Party Transactions

Transactions and Agreements between Hertz Holdings and Hertz

In ~~June 2019, Hertz entered into~~May 2021, upon expiration of a ~~master~~ loan ~~agreement~~originated in May 2020 with Hertz Holdings, ~~for a facility size of $425 million with an expiration in June 2020 (the "2019 Master Loan"). The interest rate was based on the U.S. Dollar LIBOR rate plus a margin.~~

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the full amount outstanding under the 2019 Master Loan was deemed uncollectible, resulting in a charge of $133 million during the second quarter of 2020. Additionally, the loan due to an affiliate, which represents a tax-related liability from Hertz to Hertz Holdings, in the amount of $65 million was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets of Hertz as of March 31, 2021 and December 31, 2020. See Note 15, "Liabilities Subject to Compromise."

~~On May 23, 2020,~~ Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May ~~2021~~2022 (the ~~"New~~"2021 Master Loan"). The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. As of December 31, 2021, there was no outstanding balance under the 2021 Master Loan. As of March 31, ~~2021 and December 31, 2020,~~2022, there ~~was $1 million, respectively,~~is no outstanding balance under the ~~New~~2021 Master Loan.

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~~Unaudited~~

767 Auto Leasing LLC

In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated with ~~the Icahn Group,~~ a related party ~~during the first quarter of~~until May 2020, the option to acquire certain vehicles from Hertz at rates aligned with the rates at which Hertz sells vehicles to third parties. Hertz leases the vehicles purchased by 767 under the 767 Lease Agreement or from third parties, under a mutually developed fleet plan and Hertz manages, services, repairs, sells and maintains those leased vehicles on behalf of 767. Hertz currently rents the leased vehicles to drivers of transportation network companies ("TNC") from rental counters within locations leased or owned by affiliates of 767, including locations operated under a master lease agreement with The Pep Boys – Manny, Joe & Jack. The 767 Lease Agreement had an initial term, as extended, of approximately 22 months, and is subject to automatic six month renewals thereafter, unless terminated by either party (with or without cause) prior to the start of any such six month renewal.

~~767’s payment obligations under the 767 Lease Agreement are guaranteed by American Entertainment Properties Corp. ("AEPC"), an entity affiliated with Carl C. Icahn and his affiliates.~~Hertz. During the three months ended March 31, 2021, 767 distributed $10 million to ~~AEPC~~American Entertainment Properties Corp. along with the return of certain ~~vehicles, and there were no cash contributions from AEPC~~vehicles. The 767 Lease Agreement was terminated effective October 31, 2021. Prior to ~~767. There were no cash distributions or contributions to or from AEPC during~~ the ~~three months ended March 31, 2020, except for certain services.~~

~~The Company is entitled to 25%~~termination of ~~the profit from the rental of the leased vehicles, as specified in~~ the 767 Lease Agreement, ~~which is variable and based primarily on~~ the ~~rental revenue, less certain vehicle-related costs, such as depreciation, licensing and maintenance expenses. The~~ Company ~~has~~ determined that it iswas the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly ~~impact~~impacted 767's economic performance and the Company's obligation to absorb 25% of 767's gains/~~losses. Accordingly,~~losses and, accordingly, 767 iswas consolidated by the Company as a VIE.

Note 14—Segment Information

The Company’s ~~chief operating decision maker~~CODM assesses performance and allocates resources based upon the financial information for the Company’s reportable segments. In the second quarter of 2021, in connection with the emergence from Chapter 11 and changes in how the Company's CODM regularly reviews operating ~~segments. The~~results and allocates resources, the Company ~~aggregates certain of its operating segments into~~revised its reportable ~~segments.~~segments to include Canada, Latin America and the Caribbean in its Americas RAC reportable segment, which were previously included in its International RAC reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. The Company has identified 32 reportable segments, which are consistent with its operating segments and organized based on the products and services provided ~~by its operating segments~~ and the geographic areas in which ~~its operating segments conduct~~ business is conducted, as follows:

•~~U.S. Rental Car ("U.S. RAC")~~Americas RAC – rental of vehicles (cars, crossovers, vans and light trucks), as well as sales of value-added services, in the U.S., Canada, Latin America and ~~consists of~~ the ~~Company's U.S. operating segment;~~Caribbean; and

•International ~~Rental Car ("International RAC")~~RAC – rental and leasing of vehicles (cars, crossovers, vans ~~crossovers~~ and light trucks), as well as sales of value-added services internationally and consists primarily of the Company's Europe and Other International operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments; andother international locations.

•~~All Other Operations – primarily consists~~In addition, in the second quarter of ~~the Company's Donlen vehicle leasing and fleet management business, which was sold on March 30,~~ 2021, ~~together with other business activities which represented less than 1% of revenues and expenses of the segment. See Note 3, "Divestitures," for further information. As~~as a result of the Donlen Sale, ~~the Company will be revising its reportable segments~~as disclosed in Note 3, "Divestitures," the ~~second quarter of 2021, and~~ All Other Operations ~~will~~reportable segment, which consisted primarily of the Company's former Donlen business, was no longer bedeemed a reportable segment.

In addition to ~~the above~~its reportable segments and other operating activities, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt). Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.

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The following tables provide significant ~~statements~~statement of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.

Three Months Ended
March 31,
(In millions) 2021 2020
Revenues
U.S. Rental Car $ 946 $ 1,381
International Rental Car 207 368
All Other Operations(1)
136 174
Total Hertz Global and Hertz $ 1,289 $ 1,923
Depreciation of revenue earning vehicles and lease charges
U.S. Rental Car $ 205 $ 463
International Rental Car 38 89
All Other Operations(1)(2)
0 125
Total Hertz Global and Hertz $ 243 $ 677
Adjusted EBITDA
U.S. Rental Car $ 24 $ (199)
International Rental Car (6) (45)
All Other Operations(1)
13 24
Corporate (29) (23)
Total Hertz Global and Hertz $ 2 $ (243)


	Three Months Ended March 31,
(In millions)	2022		2021
Revenues
Americas RAC	$	1,558	$	967
International RAC	252		186
Total reportable segments	1,810		1,153
All other operations(1)	—		136
Total Hertz Global and Hertz	$	1,810	$	1,289
Depreciation of revenue earning vehicles and lease charges, net
Americas RAC	$	(93)	$	210
International RAC	34		33


Total Hertz Global and Hertz	$	(59)	$	243

Adjusted EBITDA
Americas RAC	$	641	$	26
International RAC	27		(8)
Total reportable segments	668		18
All other operations(1)	—		13
Corporate	(54)		(29)
Total Hertz Global and Hertz	$	614	$	2

(1) Substantially ~~all of this reportable segment is~~ comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2) The decrease in depreciation of revenue earning vehicles and lease charges is due to the suspension of depreciation for the Donlen business while classified as held for sale, prior to closing on March 30, 2021 as disclosed in Note 3, "Divestitures."

(In millions) March 31, 2021 December 31, 2020
Total assets
U.S. Rental Car $ 11,509 $ 11,042
International Rental Car 2,940 2,956
All Other Operations(1)
1 1,818
Corporate 2,160 1,092
Total Hertz Global(2)
16,610 16,908
Corporate - Hertz(3)
(28) (28)
Total Hertz(2)
$ 16,582 $ 16,880


	As of
(In millions)	March 31, 2022		December 31, 2021
Revenue earning vehicles, net
Americas RAC	$	9,247	$	7,897
International RAC	1,317		1,329
Total Hertz Global and Hertz	$	10,564	$	9,226
Total assets
Americas RAC	$	15,959	$	14,352
International RAC	3,004		2,978
Total reportable segments	18,963		17,330

Corporate	1,978		2,453
Total Hertz Global(1)	20,941		19,783
Corporate - Hertz	(1)		(3)
Total Hertz(1)	$	20,940	$	19,780

(1) Substantially all of this reportable segment is comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures." At December 31, 2020, includes $1.8 billion of Donlen's assets which were classified as held for sale in the accompanying unaudited condensed consolidated balance sheet.

~~(2)~~ The consolidated total assets of Hertz Global and Hertz as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of VIEs of ~~$513~~$706 million and ~~$511~~$734 million, respectively, which can only be used to settle obligations of the VIEs. See ~~"Special Purpose Entities"~~"Pledges Related to Vehicle Financing" in Note 6,5, "Debt,~~" and "767 Auto Leasing LLC" in Note 13, "Related Party Transactions,~~" for further information.

(3) Excludes net proceeds of $28 million from an open market sale of Hertz Global common stock completed in June 2020, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheets at March 31, 2021 and December 31, 2020.

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Unaudited

Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:

Hertz Global

Three Months Ended
March 31,
(In millions) 2021 2020
Adjusted EBITDA:
U.S. Rental Car $ 24 $ (199)
International Rental Car (6) (45)
All Other Operations(1)
13 24
Total reportable segments 31 (220)
Corporate(2)
(29) (23)
Total Hertz Global 2 (243)
Adjustments:
Non-vehicle depreciation and amortization (54) (53)
Non-vehicle debt interest, net (44) (57)
Vehicle debt-related charges(3)
(28) (9)
Restructuring and restructuring related charges(4)
(12) (7)
Information technology and finance transformation costs(5)
(6) (17)
Reorganization items, net(6)
(42) 0
Pre-reorganization charges and non-debtor financing charges(7)
(23) 0
Gain from the Donlen Sale(8)
392 0
Other items(9)
83 25
Income (loss) before income taxes $ 268 $ (361)



	Three Months Ended March 31,
(In millions)	2022		2021
Adjusted EBITDA:
Americas RAC	$	641	$	26
International RAC	27		(8)
Total reportable segments	668		18
All other operations(1)	—		13
Corporate(2)	(54)		(29)
Total Hertz Global	614		2
Adjustments:
Non-vehicle depreciation and amortization	(33)		(54)
Non-vehicle debt interest, net	(39)		(44)
Vehicle debt-related charges(3)	(7)		(28)

Restructuring and restructuring related charges(4)	(6)		(12)

Information technology and finance transformation costs(5)	1		(6)
Reorganization items, net(6)	—		(42)
Pre-reorganization charges and non-debtor financing charges(7)	—		(23)
Gain from the Donlen Sale(8)	—		392
Change in fair value of Public Warrants(9)	50		—
Unrealized gains (losses) on financial instruments(10)	44		—
Other items(11)	(68)		83
Income (loss) before income taxes	$	556	$	268

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Unaudited

Hertz


		Three Months Ended March 31,				Three Months Ended March 31,
(In millions)	(In millions)	2021		2020			(In millions)	2022		2021
Adjusted EBITDA:	Adjusted EBITDA:						Adjusted EBITDA:
U.S. Rental Car		$	24	$	(199)
International Rental Car		(6)		(45)
All Other Operations(1)		13		24
Americas RAC							Americas RAC	$	641	$	26
International RAC							International RAC	27		(8)
Total reportable segments	Total reportable segments	31		(220)			Total reportable segments	668		18
All other operations(1)							All other operations(1)	—		13
Corporate(2)	Corporate(2)	(29)		(23)			Corporate(2)	(54)		(29)
Total Hertz Global		2		(243)
Total Hertz							Total Hertz	614		2
Adjustments:	Adjustments:						Adjustments:
Non-vehicle depreciation and amortization	Non-vehicle depreciation and amortization	(54)		(53)			Non-vehicle depreciation and amortization	(33)		(54)
Non-vehicle debt interest, net	Non-vehicle debt interest, net	(44)		(55)			Non-vehicle debt interest, net	(39)		(44)
Vehicle debt-related charges(3)	Vehicle debt-related charges(3)	(28)		(9)			Vehicle debt-related charges(3)	(7)		(28)

Restructuring and restructuring related charges(4)	Restructuring and restructuring related charges(4)	(12)		(7)			Restructuring and restructuring related charges(4)	(6)		(12)

Information technology and finance transformation costs(5)	Information technology and finance transformation costs(5)	(6)		(17)			Information technology and finance transformation costs(5)	1		(6)
Reorganization items, net(6)	Reorganization items, net(6)	(42)		0			Reorganization items, net(6)	—		(42)
Pre-reorganization charges and non-debtor financing charges(7)	Pre-reorganization charges and non-debtor financing charges(7)	(23)		0			Pre-reorganization charges and non-debtor financing charges(7)	—		(23)
Gain from the Donlen Sale(8)	Gain from the Donlen Sale(8)	392		0			Gain from the Donlen Sale(8)	—		392
Other items(9)		83		25
Unrealized gains (losses) on financial instruments(10)							Unrealized gains (losses) on financial instruments(10)	44		—
Other items(11)							Other items(11)	(68)		83
Income (loss) before income taxes	Income (loss) before income taxes	$	268	$	(359)		Income (loss) before income taxes	$	506	$	268

(1)Substantially ~~all of this reportable segment is~~ comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2)Represents other reconciling items primarily consisting of general corporate expenses, non-vehicle interest expense, as well as other business activities.

(3)Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(4)Represents charges incurred under restructuring actions as defined in U.S. ~~GAAP, excluding impairments and asset write-downs. See Note 8, "Restructuring," for further information.~~GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(5)Represents costs associated with the Company’s information technology and finance transformation programs, both of which ~~are~~were multi-year initiatives to upgrade and modernize the Company’s systems and processes.

(6)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note ~~16,~~15, "Reorganization Items, Net."

(7)Represents charges incurred prior to the filing of the Chapter 11 Cases ~~as disclosed in Note 1, "Background,"~~ which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

(8)Represents the net gain from the sale of the Company's Donlen business on March 30, 2021, as disclosed in Note 3, "Divestitures."

(9)Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.

(10)Represents unrealized gains (losses) on derivative financial instruments. See Note 10, "Financial Instruments."

(11)Represents miscellaneous ~~items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests.~~items. For the three months ended March 31, 2022, primarily includes bankruptcy claims, certain non-cash stock-based compensation charges, certain professional fees and charges related to the settlement of bankruptcy claims. For three months ended March 31, 2021, ~~also~~ includes $100 million associated with the suspension of depreciation for the Donlen business while classified as held for sale, partially offset by charges for a multiemployer pension plan withdrawal liability. ~~For the three months ended March 31, 2020, also includes a $20 million gain on the sale of non-vehicle capital assets and $13 million in unrealized gains on derivative financial instruments.~~

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Unaudited

Note 15—~~Liabilities Subject to Compromise~~

The accompanying unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 include amounts classified as liabilities subject to compromise, which represent Pre-petition liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases. These amounts represent the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts. The Company will continue to evaluate these liabilities throughout the Chapter 11 process and adjust amounts as necessary. Such adjustments could be material and will be recorded in reorganization items, net in the accompanying unaudited condensed consolidated statement of operations.

~~The following table summarizes liabilities subject to compromise:~~

(In millions) March 31, 2021 December 31, 2020
Accounts payable $ 239 $ 267
Accrued liabilities(1)
139 166
Accrued taxes, net 16 19
Accrued interest on debt subject to compromise 73 70
Debt subject to compromise(2)
4,511 4,443
Liabilities subject to compromise - Hertz Global $ 4,978 $ 4,965
Due from Affiliate - Hertz(3)
65 65
Liabilities subject to compromise - Hertz $ 5,043 $ 5,030

~~(1) Includes $24 million of U.S. pension benefit obligation reported as liabilities subject to compromise as of March 31, 2021 and December 31, 2020.~~

~~(2) See Note 6, "Debt," for details of Pre-petition, non-vehicle debt reported as liabilities subject to compromise as of March 31, 2021 and December 31, 2020.~~

(3) See Note 13, "Related Party Transactions," for details of a Pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of March 31, 2021 and December 31, 2020.

~~Note 16—~~Reorganization Items, Net

The Debtors ~~have~~ incurred ~~and will continue to incur~~incremental costs ~~associated with the reorganization, including professional and consulting fees. Charges associated with~~as a result of the Chapter 11 Cases ~~have been~~and settlement of liabilities under the Plan of Reorganization which were recorded as reorganization items, net in the accompanying unaudited condensed consolidated statement of operations for the three months ended March 31, 2021.

~~For~~During the three months ended March 31, 2021, the Company incurred $42 million of charges primarily for professional fees ~~totaling~~of $57 million, partially offset by ~~the write-off of~~$15 million in write-offs for certain ~~Pre-petition~~pre-petition claims and lease ~~settlements totaling $15 million. Cash payments during~~settlements. During the three months ended March 31, 2021, ~~totaled~~cash payments were $58 ~~million. Additionally, $57~~ million ~~and $7 million~~for reorganization items. There were ~~recorded in accrued liabilities and accounts payable, respectively, in~~no cash payments for the ~~accompanying unaudited condensed consolidated balance sheet as~~three months ended March 31, 2022. As of March 31, ~~2021. The Company incurred $175 million of charges during the year ended~~2022 and December 31, ~~2020 comprised primarily of professional fees, of which $102~~2021, $25 million ~~were paid as December 31, 2020 and $46 million and $19 million were~~was recorded in ~~accrued liabilities and~~ accounts payable ~~respectively,~~ in the accompanying unaudited condensed consolidated balance sheet.

~~Note 17—Condensed Combined Debtor-in-Possession Financial Information~~

The following financial statements represent the unaudited condensed combined financial statements of the Debtors. The results of the non-debtor entities are not included in these financial statements. Intercompany transactions among the Debtors have been eliminated in the following financial statements. Intercompany transactions among the Debtor and non-debtor entities have not been eliminated in the following financial statements.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

Amounts reported for Hertz Global and Hertz are substantially the same, with the exception of that related to interest expense (income) and tax provision (benefit), as well as activity associated with the master loan agreement between Hertz and Hertz Global as disclosed in Note 13, "Related Party Transactions."

~~THE DEBTORS~~

~~CONDENSED COMBINED BALANCE SHEET~~

~~(in millions)~~

March 31, 2021 December 31, 2020
ASSETS
Cash and cash equivalents $ 534 $ 492
Restricted cash and cash equivalents 1,179 305
Total cash, cash equivalents, restricted cash and restricted cash equivalents 1,713 797
Receivables, net 404 388
Due from non-debtor affiliates 51,607 51,638
Prepaid expenses and other assets 265 183
Revenue earning vehicles, net 5 37
Property and equipment, net 530 549
Operating lease right-of-use assets 1,353 1,424
Investment in subsidiaries, net 4,893 4,527
Intangible assets, net 2,966 2,988
Goodwill 488 488
Assets held for sale(1)
0 173
Total assets $ 64,224 $ 63,192
LIABILITIES AND EQUITY
Accounts payable $ 219 $ 200
Accrued liabilities 477 412
Accrued taxes, net 84 48
Debt 740 242
Operating lease liabilities 1,314 1,385
Self-insured liabilities 243 251
Deferred income taxes, net 1,208 887
Total liabilities not subject to compromise 4,285 3,425
Liabilities subject to compromise 59,674 59,637
Liabilities held for sale(1)
0 74
Total liabilities 63,959 63,136
Total equity attributable to the Debtors 265 56
Total liabilities and equity $ 64,224 $ 63,192

(1) At December 31, 2020, the assets and certain liabilities of the Company's Donlen business were classified as assets held for sale and liabilities held for sale, respectively. On March 30, 2021, the Company's Donlen business was sold as disclosed in Note 3, "Divestitures."

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~THE DEBTORS~~

~~CONDENSED COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)~~

~~(in millions)~~


	Three Months Ended March 31, 2021
~~Total revenues~~	$	~~942~~
~~Expenses:~~
~~Direct vehicle and operating~~	~~687~~
~~Depreciation of revenue earning vehicles and lease charges~~	~~322~~
~~Selling, general and administrative~~	~~117~~
~~Interest (income) expense, net~~	34

~~Other (income) expense, net~~	18
~~Reorganization items, net~~	42
~~(Gain) from the sale of a business~~	~~(392)~~
~~Total expenses~~	~~828~~
~~Income (loss) before income taxes and equity in earnings (losses) of non-debtor entities~~	~~114~~
~~Income tax (provision) benefit~~	~~(335)~~
~~Equity in earnings (losses) of non-debtor entities~~	~~411~~
~~Net income (loss)~~	~~190~~


~~Total other comprehensive income (loss), net of tax~~	17
~~Comprehensive income (loss) attributable to the Debtors~~	$	~~207~~

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~THE DEBTORS~~

~~CONDENSED COMBINED STATEMENT OF CASH FLOWS~~

~~(in millions)~~


	Three Months Ended March 31, 2021

























~~Net cash provided by (used in) operating activities~~	$	~~(53)~~
~~Cash flows from investing activities:~~
~~Revenue earning vehicles expenditures~~	~~(10)~~
~~Proceeds from disposal of revenue earning vehicles~~	~~(25)~~
~~Non-vehicle capital asset expenditures~~	~~(8)~~
~~Proceeds from non-vehicle capital assets disposed of~~	3

~~Proceeds from the sale of business, net of cash sold~~	~~818~~
~~Capital contributions to non-debtor entities~~	~~(411)~~
~~Return of capital from non-debtor entities~~	43



~~Net cash provided by (used in) investing activities~~	~~410~~
~~Cash flows from financing activities:~~


~~Proceeds from issuance of non-vehicle debt~~	~~560~~
~~Repayments of non-vehicle debt~~	~~(1)~~







~~Net cash provided by (used in) financing activities~~	~~559~~

~~Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period~~	~~916~~
~~Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period~~	~~797~~
~~Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period~~	$	~~1,713~~

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Hertz Global Holdings, Inc. ~~(together with its consolidated subsidiaries and variable interest entities, "Hertz Global")~~ is a holding company and its principal, wholly-owned subsidiary is The Hertz ~~Corporation (together with its consolidated subsidiaries and variable interest entities, "Hertz").~~Corporation. Hertz Global consolidates Hertz for financial statement purposes, and Hertz comprises approximately the entire balance of Hertz ~~Global's~~Global’s assets, liabilities and operating cash flows. In addition, ~~Hertz's~~Hertz’s operating revenues and operating expenses comprise nearly 100% of Hertz ~~Global's~~Global’s revenues and operating expenses. As such, Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") that follows herein is for Hertz and also applies to Hertz Global in all material respects, unless otherwise noted. Differences between the operations and results of Hertz and Hertz Global are separately disclosed and explained. We sometimes use the words ~~"we," "our," "us"~~“we,” “our,” “us,” and the ~~"Company"~~“Company” in this MD&A for disclosures that relate to all of Hertz and Hertz Global.

The statements in this MD&A regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. The following MD&A provides information that we believe to be relevant to an understanding of our consolidated financial condition and results of operations.

This MD&A should be read in conjunction with the MD&A presented in our ~~2020~~2021 Form 10-K together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements,” Part II, Item 1A, "Risk Factors,” and our unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended March 31, ~~2021~~2022 (this ~~"Report"~~"Quarterly Report"), which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements and the accompanying notes including revenue earning vehicle depreciation and various claims and contingencies related to lawsuits, taxes and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and our knowledge of actions that we may undertake in the future in determining the estimates that will affect our unaudited condensed consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe to be appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.

In this MD&A we refer to the following non-GAAP measure and key metrics:

•Adjusted Corporate EBITDA – important non-GAAP measure to management because it allows management to assess the operational performance of our business, exclusive of certain items, and allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows investors to assess our operational performance on the same basis that management uses internally. Adjusted EBITDA, the segment measure of profitability and accordingly a GAAP measure, is calculated exclusive of certain items which are largely consistent with those used in the calculation of Adjusted Corporate EBITDA.

•Vehicle Utilization – Effective in the first quarter of 2022, in connection with the appointment of the new CEO (who serves as our Chief Operating Decision Maker) and arising from significantly increased activity in vehicle dispositions, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization. Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days. Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period. Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Accordingly, prior periods have been restated to conform with the revised definition.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

•Depreciation Per Unit Per Month – important key metric to management and investors as depreciation of revenue earning vehicles and lease charges is one of our largest expenses for the vehicle rental business and is driven by the number of vehicles, expected residual values at the expected time of disposal and expected hold period of the vehicles. Depreciation Per Unit Per Month is reflective of how we are managing the costs of our vehicles and facilitates a comparison with other participants in the vehicle rental industry.

•Total Revenue Per Transaction Day ("Total RPD," also referred to as "pricing") – important key metric to management and investors as it represents a measurement of the changes in underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control. Effective in the third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues to better align with current industry practice, and accordingly, prior periods have been restated to conform with the revised definition.

•Total Revenue Per Unit Per Month ("Total RPU") – important key metric to management and investors as it provides a measure of revenue productivity relative to the ~~total~~ number of vehicles in our rental fleet whether owned or leased ("Average Rentable Vehicles"). Effective in the third quarter of 2021, we revised our calculation of Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice and effective in the first quarter of 2022, we revised to use Average Rentable Vehicles as the denominator in our calculation of Total RPU. Average Rentable Vehicles excludes vehicles for sale on the Company’s retail lots or ~~"fleet capacity").~~

~~Table~~actively in the process of ~~Contents~~being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. There has been no change to revenue as used in the numerator of the calculation which includes vehicle rental and rental related revenues, licensee revenue and ancillary retail vehicle sales revenue. Prior periods have been restated to conform with the revised definition.

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

•Transaction Days – important key metric to management and investors as it represents the number of revenue generating days ("volume"). It is used as a component to measure Total RPD and Vehicle Utilization. Transaction Days represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.

•Vehicle Utilization – important key metric to management and investors because it is the measurement of the proportion of our vehicles that are being used to generate revenues relative to fleet capacity. Higher Vehicle Utilization means more vehicles are being utilized to generate revenues.

Our non-GAAP measure and key metrics should not be considered in isolation and should not be considered superior to, or a substitute for, financial measures calculated in accordance with U.S. GAAP. The above non-GAAP measure and key metrics are defined, and the non-GAAP measure is reconciled to its most comparable U.S. GAAP measure, in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

OUR COMPANY

Hertz Holdings was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns Hertz, Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918. We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands. In addition to vehicle rental, we provide integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, which was sold on March 30, 2021.

We operate our vehicle rental business globally from company-owned, licensee and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East and New Zealand. We also sell vehicles through Hertz Car Sales and operate the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. Previously, in addition to vehicle rental, we provided integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, which was sold on March 30, 2021.

~~OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT~~

~~Impact of COVID-19 on our Busines~~s

In March 2020, the World Health Organization declared COVID-19 a pandemic, affecting multiple global regions. The impact of this pandemic has been extensive in many aspects of society, which has resulted in significant disruptions to the global economy, as well as businesses around the world. In an effort to halt the spread of COVID-19, many governments around the world placed significant restrictions on travel, individuals voluntarily reduced their air and other travel in attempts to avoid the outbreak, and many businesses announced closures and imposed travel restrictions. There is continued uncertainty about the duration of the negative impact from COVID-19 and the length and scope of travel restrictions and business closures imposed by governments of impacted countries and voluntarily undertaken by private businesses.

~~Voluntary Petitions for Bankruptcy~~

On May 22, 2020, the Debtors filed Petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases are being jointly administered for procedural purposes only under the caption ~~In re The Hertz Corporation, et al., Case No. 20-11218 (MFW)~~. Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk. The information on this website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

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THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

proposed Disclosure Statement, in each case dated as of March 29, 2021; a proposed Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 3, 2021; a proposed Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 10, 2021; a proposed Second Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, dated as of April 14, 2021 and April 15, 2021, respectively; a proposed Third Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 16, 2021; and a proposed Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 21, 2021, which Disclosure Statement the Debtors further updated on April 21, 2021. On April 22, 2021, the Debtors filed the Proposed Plan and Disclosure Statement.

The Disclosure Statement describes, among other things, the events leading to the Chapter 11 Cases; the Debtors contemplated Restructuring; the proposed plan of reorganization; certain events that have occurred or are anticipated to occur during the Chapter 11 Cases, including the solicitation of votes to approve the Proposed Plan from certain of the Debtors’ stakeholders; certain risk factors related to the Plan, certain tax considerations, and certain other aspects of the Restructuring. The Disclosure Statement and solicitation procedures with respect to the Proposed Plan was approved by the Bankruptcy Court at a hearing held on April 21, 2021 and an order to that effect was entered on April 22, 2021. The Proposed Plan is now subject to a vote by the Debtors' stakeholders and a subsequent confirmation hearing of the Bankruptcy Court, currently scheduled for June 10, 2021. In addition to approval by the Bankruptcy Court, consummation of the Proposed Plan remains subject to the satisfaction of other conditions.

Under the Proposed Plan, the Plan Sponsors have committed to provide equity capital to fund the Debtors' exit from Chapter 11 as reflected in Transaction Documents. Under the Proposed Plan, the Debtors anticipate exiting from Chapter 11 with approximately $2.2 billion of global liquidity (inclusive of capacity under the anticipated exit revolving credit facility) and only $1.3 billion in non-vehicle debt (exclusive of ABS facilities and a revolving credit facility).

•Impact of COVID-19 on our Business Environment~~the Proposed Plan will raise approximately $3.9 billion in cash proceeds, comprised of:~~

◦~~$565 million from the purchase of common stock in the reorganized entity by the Plan Sponsors;~~

◦~~$385 million from the purchase of preferred stock by plan sponsors Centerbridge Partners, L.P. and Warburg Pincus LLC; and~~

◦~~$1.3 billion in proceeds from our anticipated new exit term loan facility.~~

•~~Such cash proceeds will be used, in part, to provide the following distributions to our stakeholders pursuant to the terms of the Proposed Plan:~~

◦~~administrative priority and secured claims will be paid in cash in full;~~

◦~~the holders of our €725 million European Vehicle Notes will be paid in cash in full;~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

◦~~the holders of general unsecured claims will receive cash payments of not more than $550 million in the aggregate, which we estimate will provide a recovery of approximately 100 percent; and~~

◦our existing equity will be cancelled and existing equity holders will receive new six-year warrants to purchase, in the aggregate 4%, of the reorganized entity's common stock, subject to certain conditions, with an exercise price to be determined based on an equity value of the reorganized entity of $6.1 billion.

In ~~light~~March 2020, the World Health Organization declared COVID-19 a pandemic, affecting multiple global regions. In an effort to halt the spread of COVID-19, many governments around the world placed significant restrictions on travel. Beginning in the second half of 2021, and continuing ~~interest from~~into 2022, many government-imposed restrictions have been lifted or eased, and travel, particularly domestic leisure travel, has experienced a strong rebound. However, there remains continued uncertainty about the ~~Alternative Sponsor Group, on April 28, 2021,~~duration of the COVID-19 pandemic and its variants.

Voluntary Petitions for Bankruptcy ~~Court entered the Bid Procedures Order, among other things, establishing bidding~~ and ~~auction procedures relating to the submission of alternative plan proposals.~~Emergence

On May 2,22, 2020, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Court. On June 10, 2021, the ~~Alternative Sponsor Group submitted the Alternative~~ Plan ~~Proposal.~~

~~On May 4, 2021, we determined that the Alternative Plan Proposal constitutes a “Superior Proposal” as that term is defined under the Debtors’ EPCA with the Plan Sponsors dated as~~ of ~~April 3, 2021 and approved~~Reorganization was confirmed by the Bankruptcy Court and on ~~April 22, 2021. Pursuant to the Bid Procedures Order,~~June 30, 2021, the Plan Sponsors will have until 5:00 p.m., Eastern Time, on May 7, 2021 to indicate if they intend to counter the Alternative Plan Proposal. If the Plan Sponsors determine to counter the Alternative Plan Proposal, an Auction will be conducted on May 10, 2021. A hearing before the Bankruptcy Court to approve the results of ~~the Auction along with supplemental solicitation materials, if any, will be conducted on May 14, 2021.~~

~~This Quarterly Report on Form 10-Q is not a solicitation of votes to accept or reject the Proposed Plan. Information contained in the Proposed Plan~~Reorganization became effective and the Disclosure Statement is subject to change, whether as a result of additional amendments or supplements to the Proposed Plan or Disclosure Statement or otherwise. The documents and other information available via website or elsewhere are not part of this Quarterly Report on Form 10-Q and shall not be deemed incorporated herein.

~~Liquidity Considerations Following the~~Debtors emerged from Chapter ~~11 Filing~~

On January 20, 2021, the Bankruptcy Court authorized the Second Lease Order, which extended the forbearance period related to the Operating Lease to September 30, 2021, provided that the Debtors dispose of 121,510 lease vehicles, at least 113,381 of which will be non-program vehicles, and reach a minimum cumulative vehicle disposition proceeds of $2.0 billion by September 30, 2021. Additionally, the Second Lease Order directed the Debtors to (i) have no more than 157,262 lease vehicles by September 30, 2021 and (ii) make $756 million of base rent payments under the Operating Lease to the HVF trustee in the amount of nine equal monthly payments of $84 million commencing in January 2021 through September 2021. Of the 121,510 lease vehicles that the Debtors are obligated to dispose of, as of March 31, 2021 the Debtors have disposed approximately 14,000 lease vehicles, of which 9,000 were non-program vehicles. See the "Liquidity and Capital Resources" section of this MD&A for further information.

On January 27, 2021, Hertz subsidiary, TCL Funding Limited Partnership, entered into the Funding LP Series 2021-A Notes which provide for aggregate maximum borrowings of CAD$350 million on a revolving basis, subject to availability. The initial draw of CAD$120 million was used, in part, to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest, as disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

During the first quarter of 2021 an additional 278 off airport and 26 airport locations with unexpired leases were authorized by the Bankruptcy Court for rejection in our U.S. RAC segment, as further disclosed in Note 7, "Leases," in Part I, Item 1 of this Quarterly Report on Form 10-Q. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed in Part II, Item 7, "Contractual Obligations" included in our 2020 Form 10-K.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

As a result of our actions to continue to eliminate costs in 2021, we (i) negotiated rent concessions in the form of abatements of fixed and variable rent payments for certain of our airport and off airport locations in the amount of approximately $100 million which substantially represents amounts previously due in the period between January 1, 2021 and March 31, 2021; (ii) initiated a restructuring program in our International RAC segment; and (iii) reduced our vehicle expenditures by $2.8 billion, or 65%, and reduced our capital expenditures by $50 million, or 85%, in the first quarter of 2021 compared to 2020. We continue to review our cost structure and fleet size to align with expected rental car volumes, including in response to potential increases in travel as indicated by traveler throughput increases beginning in March 2021, as measured by the U.S. Transportation Security Administration.11.

Our Business

We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands. ~~In addition to vehicle rental, we provided integrated vehicle leasing and fleet management solutions through our Donlen business, which was sold on March 30, 2021.~~ Our profitability is primarily a function of the volume, mix and pricing of rental transactions and the utilization of vehicles, the related ownership cost of vehicles and other operating costs. Significant changes in the purchase price or residual values of vehicles or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes. We continue to balance our mix of non-program and program vehicles based on market conditions, including residual values. Our business requires significant expenditures for vehicles, and as such, we require substantial liquidity to finance such expenditures.

~~Our strategy includes optimization of our vehicle rental operations, disciplined performance management and evaluation of all locations and the pursuit of same-store sales growth.~~

Our ~~total~~strategy is focused on excellence in execution of our rental operations, electrification of the fleet, shared mobility, connected cars and exiting vehicles from the fleet directly to consumers. Our revenues are primarily derived from rental and related charges and consist ~~of:~~

•~~Worldwide~~of worldwide vehicle rental ~~revenues –~~ revenues from all company-operated vehicle rental operations ~~including~~and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees. Also included are ancillary revenues associated with retail vehicle sales and certain royalty fees from our franchisees (such fees are less than 2% of total revenues each period)~~; and~~

•~~All other operations revenues – revenues from vehicle leasing and fleet management services by our Donlen business, which was sold on March 30, 2021, and other business activities.~~.

Our expenses primarily consist of:

•Direct vehicle and operating expense ("DOE"), primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; and other costs relating to the operation and rental of revenue earning vehicles, such as damage, maintenance and fuel costs;

•Depreciation expense and lease charges, net relating to revenue earning vehicles, including gains and losses and related costs associated with the disposal of vehicles;

•Depreciation and amortization expense relating to non-vehicle assets;

•Selling, general and administrative expense ("SG&A"), which includes advertising costs and administrative personnel costs, along with costs for information technology and finance transformation programs; and

•Interest expense, ~~net; and~~net.

•~~Reorganization items, net, which includes charges associated with the Chapter 11 Cases, primarily professional fees.~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

~~Our Business Segments~~

We have identified three reportable segments, which are organized based on the products and services provided by our operating segments and the geographic areas in which our operating segments conduct business, as follows:

•~~U.S. RAC – Rental of vehicles, as well as sales of value-added services, in the U.S.;~~

•~~International RAC – Rental and leasing of vehicles, as well as sales of value-added services, internationally; and~~

•All Other Operations – Comprised primarily of our Donlen business, which provides vehicle leasing and fleet management services, and other business activities. Substantially all of the assets and liabilities of our Donlen business were classified as held for sale in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020, and were sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~In addition to the above reportable segments, we have corporate operations. We assess performance and allocate resources based upon the financial information for our operating segments.~~

~~Seasonality~~

Our vehicle rental operations are a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months ("our peak season") for the majority of countries where we generate our revenues. To accommodate increased demand, we ~~typically~~ increase our available fleet and staff. As demand declines, fleet and staff ~~during the second and third quarters of the year. However, as a result of the Second Lease Order, the Debtors~~ are to dispose of 121,510 lease vehicles, at least 113,381 of which will be non-program vehicles, and reach a minimum cumulative vehicle disposition proceeds of $2.0 billion by September 30, 2021. Additionally, the Second Lease Order directed the Debtors to (i) have no more than 157,262 lease vehicles by September 30, 2021. The continuing semiconductor microchip manufacturing shortage may delay or impact our ability to obtain a sufficient supply of new vehicles to align with rental demands through the first quarter of 2022. This shortage may result in increased vehicle acquisition costs.decreased accordingly. A number of our other major operating costs, including

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

airport concession fees, commissions and vehicle liability expenses, are directly related to revenues or transaction volumes. ~~In addition, our management expects to utilize enhanced process improvements, including utilization initiatives and the use of our information technology systems, to help manage our variable costs.~~ We also maintain a flexible workforce, with a significant number of part-time and seasonal workers. Certain operating expenses, including real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, ~~the costs of operating our information technology systems~~ and minimum staffing costs, remain fixed and cannot be adjusted for ~~seasonal~~ demand. ~~During~~

Our Reportable Segments

In the ~~first~~second quarter of 2021, ~~278 off airport~~in connection with our emergence from Chapter 11, and ~~26 airport locations with unexpired leases were authorized by~~changes in how our CODM regularly reviews operating results and allocates resources, we revised our reportable segments to include Canada, Latin America and the ~~Bankruptcy Court for rejection~~Caribbean in our ~~U.S.~~Americas RAC reportable segment, which were previously included in our International RAC reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. We have identified two reportable segments, which are consistent with our operating segments and organized based on the products and services provided and the geographic areas in which business is conducted, as follows:

•Americas RAC – Rental of vehicles, as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean; and

•International RAC – Rental and leasing of vehicles, as well as sales of value-added services, internationally and consists primarily of our Europe and other international locations.

Also, in the second quarter of 2021, as a result of the Donlen Sale, the All Other Operations reportable segment, which was primarily comprised of the Donlen business, was no longer deemed to be a reportable segment.

In addition to the above reportable segments, we have corporate operations. We assess performance and allocate resources based upon the financial information for our operating segments.

Three Months Ended March 31, ~~2021~~2022 Operating Overview

~~The global COVID-19 pandemic continued~~Effective in the first quarter of 2022, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization and Total RPU. Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Accordingly, prior periods have been restated to ~~negatively affect airline travel~~reflect this change. Effective during the ~~three months ended March 31,~~third quarter of 2021, ~~compared to the three months ended March 31, 2020. As a large portion~~we changed our definition of our business is generated at airport locations, disruptions in airline travel has continued to adversely impact our results of operations. However, U.S. airline travel saw traveler throughput increase, as measured by the U.S. Transportation Security Administration, beginning in March 2021 which generated increased demand for rental vehicles and improved pricing across the industry. This increase in travel demand appears to be accelerating into the second quarter as reflected in Total RPD and ~~Transaction Days. Consequently, we expect increased demand~~Total RPU to include ancillary retail sales revenues to better align with current industry practice, and ~~improved pricing~~accordingly, prior periods have been restated to ~~continue in~~conform with the revised definitions. Effective during the second quarter of ~~2021.~~2021, we began reporting non-vehicle depreciation expense on a separate line item in the consolidated statement of operations, and accordingly, prior periods have been restated to reflect this change.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The following charts provide several key factors influencing our results for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

(1) Includes impact of foreign currency exchange at average rates ("fx").

(2) Results shown are in constant currency as of December 31, ~~2020.~~2021.

(3) The percentages shown in this chart reflect Vehicle Utilization versus period-over-period change.

For more information on the above, see the discussion of our results on a consolidated basis and by segment that follows herein. In this MD&A, certain amounts in the following tables are denoted as in millions. Amounts such as percentages are calculated from the underlying numbers in thousands, and as a result, may not agree to the amount when calculated from the tables in millions.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Critical Accounting Estimates

The continued ~~impacts~~uncertainty of the duration and impact from COVID-19 could have a material impact to certain critical accounting estimates, and as a result, may have an adverse impact on our future operating results.

Revenue Earning Vehicles

Our principal assets are revenue earning vehicles, which represent approximately ~~48%~~58% of our total assets as of March 31, ~~2021.~~2022. As a result of ~~the Chapter 11 Cases, the Bankruptcy Court may issue additional orders directing us~~a semiconductor microchip manufacturing shortage and associated impacts to ~~dispose of vehicles sooner than anticipated. Changes~~residual values, changes in ~~any or all of~~ these variables could cause a material change in our estimates regarding depreciation expense.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

~~Recoverability of Goodwill and Indefinite-lived Intangible Assets~~

As of March 31, 2021, we quantitatively tested the recoverability of our goodwill and indefinite-lived intangible assets in our International RAC segment due to continued adverse impacts from COVID-19 and a reduction in our cash flow projections. The quantitative fair value test utilized our most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 1% and a range of discount rates between 13% and 15%. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million. As a result of the foregoing considerations, along with the consideration of other indicators noted in ASC 350, we concluded there were no indicators of impairment triggered for our U.S. RAC segment in the first quarter of 2021.

Further deterioration in the general economic conditions in the travel industry, our cash flows and our ability to obtain future financing to maintain our fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. We will continue to closely monitor actual results versus our expectations as well as any significant changes in our expected timing of emergence from bankruptcy, market events or conditions, including the impact of COVID-19 on our business and the travel industry, and the resulting impact to our assumptions about future estimated cash flows and the weighted average cost of capital. If our expectations of our operating results, both in magnitude or timing, do not materialize, or if our weighted average cost of capital increases, we may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

~~Subrogation Receivables~~

The continued impact of COVID-19 could result in a deterioration of the credit worthiness of our customers and third-parties regarding our subrogation receivables, and as a result we could incur material write-offs or a reduction in future collections.

~~Tax~~

We may record additional valuation allowances on our deferred tax assets. Further, in some jurisdictions, we may incur additional cash taxes due to changes in fleet acquisitions and dispositions and limitations on utilization of net operating losses.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ


		Three Months Ended March 31,				Percent Increase/(Decrease)	Three Months Ended March 31,							Percent Increase/(Decrease)
($ In millions)	($ In millions)	2021		2020				($ In millions)	2022				2021			Percent Increase/(Decrease)
Total revenues	Total revenues	$	1,289	$	1,923	(33)%				Total revenues	$	1,810		$	1,289		40%
Direct vehicle and operating expenses	Direct vehicle and operating expenses	827		1,241		(33)				Direct vehicle and operating expenses	1,053			778			35
Depreciation of revenue earning vehicles and lease charges		243		677		(64)
Depreciation of revenue earning vehicles and lease charges, net										Depreciation of revenue earning vehicles and lease charges, net	(59)			243			NM
Non-vehicle depreciation and amortization										Non-vehicle depreciation and amortization	33			54			(39)
Selling, general and administrative expenses	Selling, general and administrative expenses	156		208		(25)				Selling, general and administrative expenses	235			151			56
Interest expense, net:	Interest expense, net:									Interest expense, net:
Vehicle	Vehicle	104		118		(12)				Vehicle	5			104			(95)
Non-vehicle	Non-vehicle	44		55		(20)				Non-vehicle	39			44			(10)
Interest expense, net	Interest expense, net	148		173		(14)				Interest expense, net	44			148			(70)

Other (income) expense, net	Other (income) expense, net	(3)		(17)		(84)				Other (income) expense, net	(2)			(3)			(44)
Reorganization items, net	Reorganization items, net	42		—		NM				Reorganization items, net	—			42			(100)
(Gain) from the sale of a business	(Gain) from the sale of a business	(392)		—		NM				(Gain) from the sale of a business	—			(392)			(100)
Income (loss) before income taxes	Income (loss) before income taxes	268		(359)		NM				Income (loss) before income taxes	506			268			89
Income tax (provision) benefit	Income tax (provision) benefit	(79)		3		NM				Income tax (provision) benefit	(130)			(79)			65
Net income (loss)	Net income (loss)	189		(356)		NM				Net income (loss)	376			189			99
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	1		1		(5)				Net (income) loss attributable to noncontrolling interests	—			1			(100)
Net income (loss) attributable to Hertz	Net income (loss) attributable to Hertz	$	190	$	(355)	NM				Net income (loss) attributable to Hertz	$	376		$	190		98
Adjusted Corporate EBITDA(a)	Adjusted Corporate EBITDA(a)	$	2	$	(243)	NM				Adjusted Corporate EBITDA(a)	$	614		$	2		NM

The footnote in the table above is shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

Three Months Ended March 31, ~~2021~~2022 Compared with Three Months Ended March 31, ~~2020~~2021

Total revenues ~~decreased $634~~increased $522 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to increased travel demand resulting from the ~~continued impact~~easing of ~~COVID-19,~~government-imposed travel restrictions, where there was ~~a decrease~~an increase of ~~$435~~$591 million and ~~$161~~$67 million in our ~~U.S.~~Americas RAC and International RAC segments, ~~respectively. U.S.~~respectively, partially offset by a decrease of $136 million in All other operations. Americas RAC revenues ~~decreased~~increased due primarily to ~~lower~~higher volume ~~partially offset by higher~~and pricing. Excluding a ~~$19~~$17 million fx impact, revenues for our International RAC segment ~~decreased $180~~increased $83 million due primarily to ~~lower volume~~higher pricing and ~~pricing.~~

~~DOE~~volume. All other operations decreased ~~$414 million~~due to the Donlen Sale in the first quarter of 2021 compared to 2020 due primarily to a decrease of $299 million and $124 million in our U.S. RAC and International RAC segments, respectively. DOE in our U.S. RAC segment decreased due primarily to lower personnel costs, lower volume driven by the impact from COVID-19 on total revenues described above and a reduction in fixed costs. Excluding a $14 million fx impact, DOE in our International RAC segment decreased $138 million due primarily to lower volume driven by the impact from COVID-19 on total revenues described above and lower personnel costs.

Depreciation of revenue earning vehicles and lease charges decreased $434 million in the first quarter of 2021 compared to 2020 due primarily to a decrease of $258 million, $125 million and $51 million in our U.S. RAC, All Other Operations and International RAC segments, respectively. The decrease in our U.S. RAC segment is due primarily to strength in residual values and a reduction in fleet size in response to the Chapter 11 Cases. The decrease in our All Other Operations is due to the suspension of depreciation for the Donlen business while classified as held for sale. Excluding a $3 million fx impact, depreciation in our International RAC segment decreased $54 million due primarily to reduced fleet size and strength in residual values.2021.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~SG&A decreased $52~~DOE increased $275 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to an increase of $262 million and $26 million in our Americas RAC and International RAC segments, respectively. DOE in our Americas RAC segment increased due primarily to higher volume driven by increased travel demand. Excluding a $10 million fx impact, DOE in our International RAC segment increased $37 million due primarily to higher volume driven by the increased travel demand discussed above.

Depreciation of revenue earning vehicles and lease charges, net decreased $302 million in the first quarter of 2022 compared to 2021 due primarily to a decrease of $303 million in our Americas RAC segment. The decrease in our Americas RAC segment was due primarily to strength in residual values and longer vehicle holding periods resulting in an increase in vehicles that were fully depreciated and an increase in gains recognized on the disposition of vehicles.

Non-vehicle depreciation and amortization decreased $21 million in the first quarter of 2022 compared to 2021 due primarily to lower ~~marketing~~depreciation expense resulting from fully depreciated intangible assets related to concession rights in our Americas RAC segment.

SG&A increased $84 million in the first quarter of 2022 compared to 2021 due primarily to bankruptcy claims and non-cash stock-based compensation costs in ~~our U.S. and International RAC segments, lower personnel costs~~Corporate, increased advertising spend in our ~~U.S.~~Americas RAC segment and ~~lower~~increased facility costs in our International RAC ~~segment.~~segment, partly offset by decreased personnel costs.

Vehicle interest expense, net decreased ~~$14~~$99 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to lower average rates from the issuance of HVF III ABS Notes and the payoff and termination of HVF II debt ~~levels~~in accordance with the Plan of Reorganization in 2021 and $44 million of unrealized gains on interest rate caps on the HVF III ABS Notes primarily in our ~~U.S.~~Americas RAC segment.

Non-vehicle interest expense, net decreased ~~$11~~$4 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to lower average interest ~~on certain non-vehicle~~rates partially offset by higher debt ~~being suspended as a result of filing the Chapter 11 Cases.~~levels.

~~We had other income of $3 million for~~In the first quarter of 2021, compared to other income of $17 million in the first quarter of 2020 which was primarily comprised of a $20 million gain due to additional cash received from the sale of non-vehicle capital assets, which was completed in the fourth quarter of 2019.

Wewe incurred $42 million of net reorganization charges in ~~the first quarter of 2021 in~~ our corporate operations primarily for professional fees ~~totaling $57 million, partially offset by the write-off of certain Pre-petition claims and lease settlements totaling $15 million,~~ associated with the Chapter 11 Cases.

~~We recognized a pre-tax gain of $392 million from the sale of our Donlen business which was completed on March 30, 2021.~~

The effective tax rate was ~~29%~~26% and 1%29% in the first quarter of ~~2021~~2022 and ~~2020,~~2021, respectively, and we recorded a tax provision of ~~$79~~$130 million and ~~a tax benefit of $3~~$79 million in the first quarter of ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~effective income tax rate and related~~increase in our tax provision was driven by improvements in ~~2021 compared to~~our financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit ~~in 2020 were primarily due to the gain on the Donlen Sale.~~can be recognized.

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had $2$50 million of ~~interest expense, net, for~~income from the ~~first quarter~~change in fair value of ~~2020~~Public Warrants that was incremental to Hertz for the amounts shown for Hertz. This amount represents interest associated with amounts outstanding under a master loan agreement between the companies. Hertz includes this amount as interest income in its statement of operations, but this amount is eliminated in consolidation for purposes of presenting Hertz Global. For the first quarter of 2020, Hertz Global had $1 million of income tax benefit that was incremental to the amount shown for Hertz.three months ended March 31, 2022.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

~~U.S. Rental Car~~Americas RAC


		Three Months Ended March 31,						Percent Increase/(Decrease)	Three Months Ended March 31,								Percent Increase/(Decrease)
($ In millions, except as noted)	($ In millions, except as noted)	2021			2020					($ In millions, except as noted)	2022					2021				Percent Increase/(Decrease)
Total revenues	Total revenues	$	946		$	1,381		(32)%				Total revenues	$	1,558			$	967			61%
Depreciation of revenue earning vehicles and lease charges		$	205		$	463		(56)
Depreciation of revenue earning vehicles and lease charges, net												Depreciation of revenue earning vehicles and lease charges, net	$	(93)			$	210			NM
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	670		$	969		(31)				Direct vehicle and operating expenses	$	903			$	641			41
Direct vehicle and operating expenses as a percentage of total revenues	Direct vehicle and operating expenses as a percentage of total revenues	71		%	70		%					Direct vehicle and operating expenses as a percentage of total revenues	58		%		66		%
Non-vehicle depreciation and amortization												Non-vehicle depreciation and amortization	$	26			$	44			(40)
Selling, general and administrative expenses	Selling, general and administrative expenses	$	51		$	115		(56)				Selling, general and administrative expenses	$	86			$	52			65
Selling, general and administrative expenses as a percentage of total revenues	Selling, general and administrative expenses as a percentage of total revenues	5		%	8		%					Selling, general and administrative expenses as a percentage of total revenues	6		%		5		%
Vehicle interest expense	Vehicle interest expense	$	71		$	86		(18)				Vehicle interest expense	$	2			$	72			(98)
Reorganization items, net												Reorganization items, net	$	—			$	(14)			(100)
Adjusted EBITDA	Adjusted EBITDA	$	24		$	(199)		NM				Adjusted EBITDA	$	641			$	26			NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	19,776			31,564			(37)				Transaction Days (in thousands)(b)	25,579				20,251				26
Average Vehicles (in whole units)(c)		292,154			518,580			(44)
Average Vehicles (in whole units)(f)												Average Vehicles (in whole units)(f)	397,620				300,606				32
Average Rentable Vehicles (in whole units)(c)												Average Rentable Vehicles (in whole units)(c)	373,153				296,412				26
Vehicle Utilization(c)	Vehicle Utilization(c)	75		%	67		%					Vehicle Utilization(c)	76		%		76		%
Total RPD (in whole dollars)(d)		$	47.63		$	42.74		11
Total RPD (in dollars)(d)												Total RPD (in dollars)(d)	$	60.90			$	47.75			28
Total RPU Per Month (in whole dollars)(e)	Total RPU Per Month (in whole dollars)(e)	$	1,075		$	867		24				Total RPU Per Month (in whole dollars)(e)	$	1,391			$	1,087			28
Depreciation Per Unit Per Month (in whole dollars)(f)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	234		$	298		(21)				Depreciation Per Unit Per Month (in whole dollars)(f)	$	(78)			$	233			NM
Percentage of program vehicles as of period end	Percentage of program vehicles as of period end	1		%	9		%					Percentage of program vehicles as of period end	—		%		1		%

Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

Three Months Ended March 31, ~~2021~~2022 Compared with Three Months Ended March 31, ~~2020~~2021

Total ~~U.S.~~Americas RAC revenues ~~decreased $435~~increased $591 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to ~~lower volume, partially offset by~~ higher ~~pricing.~~pricing and volume. The ~~37% decrease~~increase in Total RPD was due primarily to higher pricing across the industry resulting from increased travel demand and industry-wide constraints on vehicles due to the Chip Shortage continuing to affect new vehicle production during the first quarter of 2022. The increase in Transaction Days was driven by ~~the impact from COVID-19 with~~ volume ~~declines in~~increases across most leisure and ~~most business categories. There was an 11% increase in Total RPD partially offsetting declines in volume due primarily to stronger pricing in leisure and most~~ business categories ~~resulting from lower fleet levels in order~~as government-imposed travel restrictions continued to ~~meet the increasing demand from travel commencing in the middle of the first quarter 2021. Off airport~~be lifted. Airport revenues comprised ~~37%~~71% of total revenues for the segment in the first quarter of ~~2021~~2022 as compared to ~~35%~~63% in the first quarter of ~~2020,~~2021 due primarily to ~~customer demand changes associated with COVID-19.~~the continued lifting of air travel restrictions discussed above.

Depreciation of revenue earning vehicles and lease charges, net for ~~U.S.~~Americas RAC decreased ~~$258~~$303 million in the first quarter of ~~2021~~2022 compared to ~~2020. Average Vehicles decreased 44% due in part to a reduction in fleet size due to the Chapter 11 Cases.~~2021. Depreciation Per Unit Per Month ~~decreased~~changed to ~~$234~~a negative expense of $78 in the first quarter of 2022 compared to an expense of $233 in the first quarter of 2021 ~~compared to $298 in the first quarter of 2020~~ due primarily to strength in residual ~~values.~~values and longer vehicle holding periods resulting in an increase in vehicles that were fully depreciated and an increase in gains recognized on the disposition of vehicles. Average Vehicles increased compared to 2021 due in part to longer vehicle holding periods.

DOE for ~~U.S.~~Americas RAC ~~decreased $299~~increased $262 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to ~~lower~~higher volume driven by the ~~impact from COVID-19~~increased travel demand discussed above ~~lower personnel~~and increased vehicle maintenance costs due to cost-reduction initiatives and lower facility costs due primarily to rent abatements and the consolidation of our off airport locations. This was partially offset by increased per vehicle maintenance and other vehicle related costs due to an aging fleet, as well as rising labor costs both of which we expect to continue throughout 2021.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~SG&A for U.S. RAC~~primarily to longer vehicle holding periods resulting from new vehicle production constraints due to the Chip Shortage.

Non-vehicle depreciation and amortization decreased ~~$64~~$18 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to lower ~~marketing and personnel costs~~depreciation expense resulting from fully depreciated intangible assets related to concession rights.

SG&A for Americas RAC increased $34 million in the first quarter of 2022 compared to 2021 due primarily to ~~cost-reduction initiatives.~~increased advertising spend.

Vehicle interest expense for ~~U.S.~~Americas RAC decreased ~~$15~~$70 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due ~~primarily~~ to ~~vehicle dispositions~~$40 million of unrealized gains on interest rate caps on the HVF III ABS Notes and a decrease resulting from lower ~~debt levels~~average rates resulting from the ~~decline~~issuance of the HVF III ABS Notes and the full repayment and termination of the HVF II ABS Notes in ~~travel due to COVID-19.~~accordance with the Plan of Reorganization in 2021.

International ~~Rental Car~~RAC


		Three Months Ended March 31,						Percent Increase/(Decrease)	Three Months Ended March 31,								Percent Increase/(Decrease)
($ in millions, except as noted)	($ in millions, except as noted)	2021			2020					($ in millions, except as noted)	2022					2021				Percent Increase/(Decrease)
Total revenues	Total revenues	$	207		$	368		(44)%				Total revenues	$	252			$	186			36%
Depreciation of revenue earning vehicles and lease charges		$	38		$	89		(58)
Depreciation of revenue earning vehicles and lease charges, net												Depreciation of revenue earning vehicles and lease charges, net	$	34			$	33			3
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	141		$	265		(47)				Direct vehicle and operating expenses	$	151			$	124			21
Direct vehicle and operating expenses as a percentage of total revenues	Direct vehicle and operating expenses as a percentage of total revenues	68		%	72		%					Direct vehicle and operating expenses as a percentage of total revenues	60		%		67		%
Non-vehicle depreciation and amortization												Non-vehicle depreciation and amortization	$	3			$	5			(28)
Selling, general and administrative expenses	Selling, general and administrative expenses	$	36		$	48		(24)				Selling, general and administrative expenses	$	42			$	32			34
Selling, general and administrative expenses as a percentage of total revenues	Selling, general and administrative expenses as a percentage of total revenues	17		%	13		%					Selling, general and administrative expenses as a percentage of total revenues	17		%		17		%
Vehicle interest expense	Vehicle interest expense	$	21		$	21		(1)				Vehicle interest expense	$	3			$	20			(87)

Adjusted EBITDA	Adjusted EBITDA	$	(6)		$	(45)		(86)				Adjusted EBITDA	$	27			$	(8)			NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	4,872			8,863			(45)				Transaction Days (in thousands)(b)	5,042				4,397				15
Average Vehicles (in whole units)(c)		75,446			147,987			(49)
Average Vehicles (in whole units)(f)												Average Vehicles (in whole units)(f)	83,591				66,995				25
Average Rentable Vehicles (in whole units)(c)												Average Rentable Vehicles (in whole units)(c)	82,364				65,149				26
Vehicle Utilization(c)	Vehicle Utilization(c)	72		%	66		%					Vehicle Utilization(c)	68		%		75		%
Total RPD (in whole dollars)(d)		$	42.49		$	45.57		(7)
Total RPD (in dollars)(d)												Total RPD (in dollars)(d)	$	50.43			$	39.92			26
Total RPU Per Month (in whole dollars)(e)	Total RPU Per Month (in whole dollars)(e)	$	915		$	910		1				Total RPU Per Month (in whole dollars)(e)	$	1,029			$	898			15
Depreciation Per Unit Per Month (in whole dollars)(f)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	168		$	220		(24)				Depreciation Per Unit Per Month (in whole dollars)(f)	$	138			$	156			(11)
Percentage of program vehicles as of period end	Percentage of program vehicles as of period end	26		%	37		%					Percentage of program vehicles as of period end	29		%		29		%

Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

Three Months Ended March 31, ~~2021~~2022 Compared with Three Months Ended March 31, ~~2020~~2021

Total revenues for International RAC ~~decreased $161~~increased $67 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due to ~~lower volume~~higher pricing and ~~pricing.~~volume. Excluding a ~~$19~~$17 million fx impact, revenues ~~decreased $180 million due to lower volume and pricing across all leisure and most business categories driven by the continued impact of COVID-19, partially offset by higher pricing in Australia.~~

Depreciation of revenue earning vehicles and lease charges for International RAC decreased $51 million in the first quarter of 2021 compared to 2020. Excluding a $3 million fx impact, depreciation decreased $54 million. Average Vehicles for International RAC decreased 49% due to downsizing the fleet as a result of COVID-19. Depreciation Per Unit Per Month for International RAC decreased to $168 for the first quarter of 2021 compared to $220 in 2020 due to the strength in residual values.

~~DOE for International RAC decreased $124 million in the first quarter of 2021 compared to 2020. Excluding a $14 million fx impact, DOE decreased $138~~increased $83 million due primarily to ~~lower volume~~higher pricing across the industry resulting from growth in travel demand as government-imposed travel restrictions continued to be eased and industry-wide constraints on vehicle supply due to the Chip Shortage affecting new vehicle production. The increase in Transaction Days was driven by ~~the impact from COVID-19 on total revenues described above and lower personnel costs due to employee furloughs and associated government support across~~higher volume in Europe ~~related to COVID-19.~~as government-imposed travel restrictions were eased resulting in increased travel demand.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Depreciation of revenue earning vehicles and lease charges, net for International RAC was flat in the first quarter of 2022 compared to 2021. Excluding a $2 million fx impact, depreciation increased $4 million. Average Vehicles for International RAC increased due in part to longer vehicle holding periods resulting from new vehicle production constraints due to the Chip Shortage. Depreciation Per Unit Per Month for International RAC decreased to $138 for the first quarter of 2022 compared to $156 in the 2021 period due primarily to strength in residual values.

DOE for International RAC increased $26 million in the first quarter of 2022 compared to 2021. Excluding a $10 million fx impact, DOE increased $37 million due primarily to higher volume driven by the increased travel demand discussed above.

SG&A for International RAC ~~decreased~~increased $11 million in the first quarter of ~~2021~~2022 compared to ~~2020. Excluding a $4 million fx impact, SG&A decreased $15 million~~2021 due primarily to ~~lower~~increased facility ~~and marketing~~ costs, ~~resulting from cost-reduction initiatives.~~partly offset by decreased personnel costs.

~~All Other Operations~~

~~The All Other Operations segment is primarily comprised of our Donlen business which was sold on March 30, 2021. See Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

~~Results of operations~~Vehicle interest expense for ~~this segment are as follows:~~

Three Months Ended
March 31, Percent Increase/(Decrease)
($ in millions) 2021 2020
Total revenues $ 136 $ 174 (22)%
Depreciation of revenue earning vehicles and lease charges $ — $ 125 NM
Direct vehicle and operating expenses $ 7 $ 7 3
Selling, general and administrative expenses $ 10 $ (4) NM
Vehicle interest expense $ 12 $ 11 13
Adjusted EBITDA $ 13 $ 24 (46)
Average Vehicles - Donlen 182,362 201,364 (9)

~~NM - Not meaningful~~

~~Donlen's revenues and Adjusted EBITDA were unfavorable~~International RAC decreased $17 million in the first quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily ~~due~~ to lower ~~leasing volume from the impact of COVID-19. The decrease in depreciation of revenue earning vehicles~~debt levels and ~~leasing charges is due to the suspension of depreciation for the Donlen business while classified as held for sale.~~unrealized gains on interest rate caps.

Footnotes to the Results of Operations and Selected Operating Data by Segment Tables

(a)Adjusted Corporate EBITDA is calculated as net income (loss) attributable to Hertz or Hertz Global, adjusted for income ~~taxes,~~taxes; non-vehicle depreciation and ~~amortization,~~amortization; non-vehicle debt interest, ~~net,~~net; vehicle debt-related ~~charges,~~charges; restructuring and restructuring related ~~charges,~~charges; information technology and finance transformation ~~costs,~~costs; reorganization items, ~~net,~~net; pre-reorganization items and non-debtor financing ~~charges,~~charges; gain from the sale of a ~~business~~business; unrealized (gains) losses from financial instruments and certain other miscellaneous items. When evaluating our operating performance, investors should not consider Adjusted Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance determined in accordance with U.S. GAAP. The reconciliations to the most comparable consolidated U.S. GAAP measure are presented below:

Hertz



	Three Months Ended March 31,
(In millions)	2022		2021
Net income (loss) attributable to Hertz	$	376	$	190
Adjustments:
Income tax provision (benefit)	130		79
Non-vehicle depreciation and amortization	33		54
Non-vehicle debt interest, net	39		44
Vehicle debt-related charges(1)	7		28

Restructuring and restructuring related charges(2)	6		12


Information technology and finance transformation costs(3)	(1)		6
Reorganization items, net(4)	—		42
Pre-reorganization and non-debtor financing charges(5)	—		23
Gain from the Donlen Sale(6)	—		(392)
Unrealized (gains) losses on financial instruments(7)	(44)		—
Other items(8)	68		(84)
Adjusted Corporate EBITDA	$	614	$	2

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Hertz

Three Months Ended
March 31,
(In millions) 2021 2020
Net income (loss) attributable to Hertz $ 190 $ (355)
Adjustments:
Income tax provision (benefit) 79 (3)
Non-vehicle depreciation and amortization 54 53
Non-vehicle debt interest, net 44 55
Vehicle debt-related charges(1)
28 9
Restructuring and restructuring related charges(2)
12 7
Information technology and finance transformation costs(3)
6 17
Reorganization items, net(4)
42 —
Pre-reorganization and non-debtor financing charges(5)
23 —
Gain from the Donlen Sale(6)
(392) —
Other items(7)
(84) (26)
Adjusted Corporate EBITDA $ 2 $ (243)

~~Hertz~~ Global


		Three Months Ended March 31,				Three Months Ended March 31,
(In millions)	(In millions)	2021		2020			(In millions)	2022		2021
Net income (loss) attributable to Hertz Global	Net income (loss) attributable to Hertz Global	$	190	$	(356)		Net income (loss) attributable to Hertz Global	$	426	$	190
Adjustments:	Adjustments:						Adjustments:
Income tax provision (benefit)	Income tax provision (benefit)	79		(4)			Income tax provision (benefit)	130		79
Non-vehicle depreciation and amortization	Non-vehicle depreciation and amortization	54		53			Non-vehicle depreciation and amortization	33		54
Non-vehicle debt interest, net	Non-vehicle debt interest, net	44		57			Non-vehicle debt interest, net	39		44
Vehicle debt-related charges(1)	Vehicle debt-related charges(1)	28		9			Vehicle debt-related charges(1)	7		28
Restructuring and restructuring related charges(2)	Restructuring and restructuring related charges(2)	12		7			Restructuring and restructuring related charges(2)	6		12

Information technology and finance transformation costs(3)	Information technology and finance transformation costs(3)	6		17			Information technology and finance transformation costs(3)	(1)		6
Reorganization items, net(4)	Reorganization items, net(4)	42		—			Reorganization items, net(4)	—		42
Pre-reorganization and non-debtor financing charges(5)	Pre-reorganization and non-debtor financing charges(5)	23		—			Pre-reorganization and non-debtor financing charges(5)	—		23
Gain from the Donlen Sale(6)	Gain from the Donlen Sale(6)	(392)		—			Gain from the Donlen Sale(6)	—		(392)
Other items(7)		(84)		(26)
Unrealized (gains) losses on financial instruments(7)							Unrealized (gains) losses on financial instruments(7)	(44)		—
Change in fair value of Public Warrants(9)							Change in fair value of Public Warrants(9)	(50)		—
Other items(8)							Other items(8)	68		(84)
Adjusted Corporate EBITDA	Adjusted Corporate EBITDA	$	2	$	(243)		Adjusted Corporate EBITDA	$	614	$	2

(1)Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(2)Represents charges incurred under restructuring actions as defined in U.S. ~~GAAP, excluding impairments and asset write-downs. See Note 8, "Restructuring," in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.~~GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(3)Represents costs associated with our information technology and finance transformation programs, both of which ~~are~~were multi-year initiatives to upgrade and modernize our systems and processes.

(4)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as ~~described~~disclosed in Note ~~16,~~15, "Reorganization Items, Net," in Part I, Item 1 of this Quarterly ~~Report on Form 10-Q, including professional fees.~~Report.

(5)Represents charges incurred prior to the filing of the Chapter 11 Cases ~~as disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q,~~ which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

(6)Represents the net gain from the sale of our Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly ~~Report on Form 10-Q.~~Report.

(7)Represents unrealized (gains) losses on derivative financial instruments. See Note 10, "Financial Instruments," in Part I, Item 1 of this Quarterly Report.

(8)Represents miscellaneous ~~items, including~~items. For 2022, primarily includes bankruptcy claims, certain non-cash stock-based compensation ~~charges. In~~charges, certain professional fees and charges related to the settlement of bankruptcy claims. For 2021, ~~also~~ includes $100 million ~~due to~~associated with the suspension of depreciation for the Donlen business while classified as held for sale, partially offset by charges for a multiemployer pension plan withdrawal liability. ~~In 2020, also includes a $20 million gain on~~

(9)Represents the ~~sale of non-vehicle capital assets and $13 million~~change in ~~unrealized gains on derivative financial instruments.~~fair value during the reporting period for Hertz Global's outstanding Public Warrants.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

(b)Transaction Days ~~represent~~represents the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

(c)Average Rentable Vehicles ~~are~~excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels and determined using a simple average of ~~the number of~~such vehicles at the beginning and end of a given period. ~~Among other things, Average Vehicles is used to calculate~~Effective in the first quarter of 2022, as discussed above, we revised our calculation of Vehicle Utilization ~~which represents~~to use Average Rentable Vehicles in the ~~portion of our vehicles that are being utilized~~denominator. Accordingly, prior periods have been restated to ~~generate revenue.~~conform with the revised definition. Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days. ~~The calculation of Vehicle Utilization is shown in the table below:~~


		U.S. Rental Car				International Rental Car					Americas RAC				International RAC
		Three Months Ended March 31,									Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021		2022		2021
Transaction Days (in thousands)	Transaction Days (in thousands)	19,776		31,564		4,872		8,863		Transaction Days (in thousands)	25,579		20,251		5,042		4,397
Average Vehicles (in whole units)		292,154		518,580		75,446		147,987
Average Rentable Vehicles (in whole units)										Average Rentable Vehicles (in whole units)	373,153		296,412		82,364		65,149
Number of days in period (in whole units)	Number of days in period (in whole units)	90		91		90		91		Number of days in period (in whole units)	90		90		90		90
Available Car Days (in thousands)	Available Car Days (in thousands)	26,294		47,191		6,790		13,467		Available Car Days (in thousands)	33,584		26,690		7,415		5,864
Vehicle Utilization	Vehicle Utilization	75	%	67	%	72	%	66	%	Vehicle Utilization	76	%	76	%	68	%	75	%

(d)Total RPD is calculated as ~~total revenues less ancillary retail vehicle sales~~ revenues with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates ("Total ~~Rental Revenues"~~Revenues - adjusted for foreign currency"), divided by the total number of Transaction Days. As discussed above, effective in the third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues, and accordingly, prior periods have been restated to conform with the revised definition. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends. The calculation of Total RPD is shown below:

U.S. Rental Car International Rental Car
Three Months Ended March 31,
($ in millions, except as noted) 2021 2020 2021 2020
Total revenues $ 946 $ 1,381 $ 207 $ 368
Ancillary retail vehicle sales revenues (4) (32) — —
Foreign currency adjustment(1)
— — — 36
Total Rental Revenues $ 942 $ 1,349 $ 207 $ 404
Transaction Days (in thousands) 19,776 31,564 4,872 8,863
Total RPD (in whole dollars) $ 47.63 $ 42.74 $ 42.49 $ 45.57



	Americas RAC				International RAC
	Three Months Ended March 31,
($ in millions, except as noted)	2022		2021		2022		2021
Revenues	$	1,558	$	967	$	252	$	186

Foreign currency adjustment(1)	—		—		2		(10)
Total Revenues - adjusted for foreign currency	$	1,558	$	967	$	254	$	176
Transaction Days (in thousands)	25,579		20,251		5,042		4,397
Total RPD (in dollars)	$	60.90	$	47.75	$	50.43	$	39.92

(1)Based on December 31, ~~2020~~2021 foreign currency exchange rates for all periods presented.

(e) Total RPU Per Month is calculated as Total ~~Rental~~ Revenues - adjusted for foreign currency divided by the Average Rentable Vehicles in each period and then divided by the number of months in the period reported. ~~The~~As discussed above, effective in the third quarter 2021, we revised our calculation of Total RPU ~~Per Month is shown below:~~to include ancillary retail vehicle sales revenues and effective in the first quarter of 2022, we revised our calculation of Total RPU to use Average Rentable Vehicles as the denominator. Accordingly, prior periods have been restated to conform with the revised definition.


		U.S. Rental Car				International Rental Car					Americas RAC				International RAC
		Three Months Ended March 31,									Three Months Ended March 31,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2022		2021		2022		2021
Total Rental Revenues		$	942	$	1,349	$	207	$	404
Average Vehicles (in whole units)		292,154		518,580		75,446		147,987
Total Revenues - adjusted for foreign currency										Total Revenues - adjusted for foreign currency	$	1,558	$	967	$	254	$	176
Average Rentable Vehicles (in whole units)										Average Rentable Vehicles (in whole units)	373,153		296,412		82,364		65,149
Total revenue per unit (in whole dollars)	Total revenue per unit (in whole dollars)	$	3,224	$	2,601	$	2,744	$	2,730	Total revenue per unit (in whole dollars)	$	4,174	$	3,262	$	3,087	$	2,694
Number of months in period (in whole units)	Number of months in period (in whole units)	3		3		3		3		Number of months in period (in whole units)	3		3		3		3
Total RPU Per Month (in whole dollars)	Total RPU Per Month (in whole dollars)	$	1,075	$	867	$	915	$	910	Total RPU Per Month (in whole dollars)	$	1,391	$	1,087	$	1,029	$	898

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

(f) Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges, per vehicle per month and is calculated as depreciation of revenue earning vehicles and lease charges, net, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates, divided by the Average Vehicles in each period, which is determined using a simple average of the number of vehicles at the beginning and end of a period, and then dividing by the number of months in the period reported. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends. The calculation of Depreciation Per Unit Per Month is shown below:

U.S. Rental Car International Rental Car
Three Months Ended March 31,
($ in millions, except as noted) 2021 2020 2021 2020
Depreciation of revenue earning vehicles and lease charges $ 205 $ 463 $ 38 $ 89
Foreign currency adjustment(1)
— — — 9
Adjusted depreciation of revenue earning vehicles and lease charges $ 205 $ 463 $ 38 $ 98
Average Vehicles (in whole units)
292,154 518,580 75,446 147,987
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) $ 702 $ 893 $ 504 $ 662
Number of months in period (in whole units)
3 3 3 3
Depreciation Per Unit Per Month (in whole dollars) $ 234 $ 298 $ 168 $ 220



	Americas RAC				International RAC
	Three Months Ended March 31,
($ in millions, except as noted)	2022		2021		2022		2021
Depreciation of revenue earning vehicles and lease charges, net	$	(93)	$	210	$	34	$	33
Foreign currency adjustment(1)	—		—		1		(2)
Adjusted depreciation of revenue earning vehicles and lease charges	$	(93)	$	210	$	35	$	31
Average Vehicles (in whole units)	397,620		300,606		83,591		66,995
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	(234)	$	698	$	415	$	468
Number of months in period (in whole units)	3		3		3		3
Depreciation Per Unit Per Month (in whole dollars)	$	(78)	$	233	$	138	$	156

(1)Based on December 31, ~~2020~~2021 foreign currency exchange rates for all periods presented.

LIQUIDITY AND CAPITAL RESOURCES

Our U.S. and international operations are funded by cash provided by operating activities and by extensive financing arrangements, both debt and equity, maintained by us in the U.S. and internationally.

Cash and Cash Equivalents

As of March 31, ~~2021,~~2022, we had ~~$1.1~~$1.5 billion of ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents and ~~$1.3 billion~~$601 million of restricted cash and ~~restricted~~ cash equivalents. As of March 31, ~~2021, $390~~2022, $408 million of ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents and ~~$68~~$86 million of restricted cash and ~~restricted~~ cash equivalents were held by our subsidiaries outside of the U.S. ~~As a result of COVID-19, we no longer~~We do not assert permanent reinvestment with respect to our non-U.S. earnings, and if not in the form of loan repayments or subject to favorable tax treaties, repatriation of some of these funds under current regulatory and tax law for use in domestic operations could expose us to additional cash taxes.

~~Voluntary Petitions~~We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations for ~~Bankruptcy~~

~~The COVID-19 pandemic spread across~~ the globe, resulting in global economic slowdown and disruptions of travel and other industries, many of which negatively impacted our business and industry. In addition, COVID-19 resulted in our employees, contractors, suppliers, customers and other business partners being prevented from conducting normal business activities temporarily or for an indefinite period of time. This was largely caused by shutdowns that were initially requested or mandated by governmental authorities. Additionally, individuals voluntarily reduced travel in attempts to avoid the outbreak. In response, we began aggressive actions to eliminate costs. However, we faced significant ongoing expenses.next twelve months.

On May 22, 2020, the Debtors filed Petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases are being jointly administered for procedural purposes only under the caption ~~In re: The Hertz Corporation, et al., Case No. 20-11218 (MFW)~~. Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk, a third party bankruptcy claims and noticing agent. The information on this website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~Borrowing Capacity and Availability~~

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of our existing debt obligations. As a result of the filing of the Chapter 11 Cases, the remaining capacity under all of our revolving credit facilities was terminated, as disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q. Consequently, the sales proceeds from vehicles which serve as collateral for such vehicle finance facilities must be applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries and are not otherwise available to fund our operations. Additionally, we are precluded from accessing any of our subordinated investment in the vehicle collateral until the related defaults are waived or the third-party funding under those facilities has been retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness. Proceeds from vehicle receivables, excluding manufacturer rebates, as of March 31, 2021 and ongoing vehicle sales must be applied to vehicle debt in amortization.

As disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, on April 21, 2021, the Bankruptcy Court approved the Debtors' Proposed Plan and Disclosure Statement, and as set forth in the associated Transaction Documents, events related to our debt are as follows. See Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

•We anticipate obtaining a new ABS Facility in an aggregate amount of $7.0 billion, comprised of a secured rental car asset-backed variable funding note in the aggregate amount of $3.0 billion and a secured rental car asset-backed bridge financing facility in an aggregate amount of up to $4.0 billion. Certain of the proceeds of the ABS Facility are expected to be used to repay outstanding vehicle financing facilities and to support our fleet financing needs for our U.S. rental car operations.

•We also anticipate obtaining Exit Credit Facilities in an aggregate amount of $2.8 billion comprised of a senior secured revolving credit facility in an aggregate committed amount of $1.5 billion plus a senior secured term loan facility in an aggregate principal amount of $1.3 billion. The Exit Credit Facilities will be secured by a first lien of substantially all assets owned as of the date of execution of the Exit Credit Facilities or acquired thereafter.

During the first quarter of 2021, 278 off airport and 26 airport locations with unexpired leases were authorized by the Bankruptcy Court for rejection in our U.S. RAC segment. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed in Part II, Item 7, "Contractual Obligations," included in our 2020 Form 10-K.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

On April 23, 2021, Hertz International Limited entered into the HIL Credit Agreement which provides an aggregate maximum principal of €250 million to meet the liquidity requirements of our European business, as disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We had waivers related to the filing of the Chapter 11 Cases under our European ABS and U.K. Financing Facility which, in April 2021, have been superseded by a comprehensive restructuring of each the European ABS and U.K. Financing Facility, as disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our inability to retain any proceeds from the sale of vehicles under our U.S. ABS programs means that our sources of liquidity are primarily our unrestricted cash and unrestricted cash equivalents on hand, cash generated from our operations and up to $800 million from our DIP Credit Agreement. As of March 31, 2021, we had total liquidity of $1.7 billion comprised of $900 million of remaining, committed availability under the DIP Credit Agreement and $812 million of unrestricted cash and unrestricted cash equivalents, net of the $275 million minimum liquidity requirement under the DIP Credit Agreement, which we believe will be sufficient to fund our operations through approximately March 31, 2022, assuming we do not experience any unforeseen liquidity needs before then, which could result in the utilization of the liquidity in advance of March 31, 2022.

Cash Flows - Hertz

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Hertz had ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents of ~~$1.1~~$1.5 billion and ~~$1.1~~$2.3 billion, respectively, and restricted cash and ~~restricted~~ cash equivalents of ~~$1.3 billion~~$601 million and ~~$383~~$393 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and ~~restricted~~ cash equivalents for the periods shown:


		Three Months Ended March 31,							Three Months Ended March 31,
(In millions)	(In millions)	2021		2020		$ Change		(In millions)	2022		2021		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	200	$	450	$	(250)	Operating activities	$	621	$	200	$	421
Investing activities	Investing activities	(18)		(2,097)		2,079		Investing activities	(1,541)		(18)		(1,523)
Financing activities	Financing activities	692		1,700		(1,008)		Financing activities	392		692		(300)
Effect of exchange rate changes	Effect of exchange rate changes	(12)		(4)		(8)		Effect of exchange rate changes	(1)		(12)		11
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents		$	862	$	49	$	813
Net change in cash and cash equivalents and restricted cash and cash equivalents								Net change in cash and cash equivalents and restricted cash and cash equivalents	$	(529)	$	862	$	(1,391)

During the three months ended March 31, ~~2021,~~2022, cash flows from operating activities ~~decreased~~increased by ~~$250~~$421 million period over period due primarily ~~due~~ to ~~the $190~~a $262 million change in net income ~~(loss)~~ attributable to Hertz, as adjusted for non-cash and non-operating ~~items.~~items, and a $159 million change in working capital accounts. Cash flows from working capital accounts ~~decreased by $60 million~~increased due primarily to ~~$58 million cash paid for~~the reduction of reorganization items and professional fees and the elimination of certain expense prepayment requirements while in ~~2021 with no comparable~~Chapter 11, partially offset by the payment of bankruptcy claims in ~~the 2020 period.~~2022 that had been previously deferred and subject to compromise while in Chapter 11 in 2021.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the three months ended March 31, ~~2021,~~2022, there was a ~~$2.1~~$1.5 billion ~~decrease~~increase in the ~~use of~~ cash ~~for~~used in investing activities period over period due primarily to ~~a $1.3 billion net reduction in cash outflows for revenue earning vehicles as we reduced our vehicle purchases due to the Chapter 11 Cases and~~ $818 million of net proceeds received from the Donlen ~~Sale.~~Sale in 2021 with no comparable in the 2022 period and a $683 million net increase in cash expenditures primarily resulting from the acquisition of vehicles to meet the increased travel demand as government-imposed travel restrictions were lifted.

Net financing cash inflows were ~~$692~~$392 million in the three months ended March 31, ~~2021~~2022 compared to cash inflows of ~~$1.7 billion in the first three months of 2020 due primarily to a $973~~$692 million ~~net reduction in vehicle debt borrowings~~ in the 2021 ~~period compared~~period. The decrease in cash inflows was due in part to ~~2020 period as we reduced our vehicle purchases due~~$767 million of dividends paid to Hertz Holdings to fund share repurchases, partially offset by $474 million of net proceeds primarily related to the ~~Chapter 11 Cases.~~issuance of new vehicle debt.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Cash Flows - Hertz Global

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Hertz Global had ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents of ~~$1.1~~$1.5 billion and ~~$1.1~~$2.3 billion, respectively, and restricted cash and ~~restricted~~ cash equivalents of ~~$1.4 billion~~$601 million and ~~$411~~$393 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and ~~restricted~~ cash equivalents for the periods shown:


		Three Months Ended March 31,							Three Months Ended March 31,
(In millions)	(In millions)	2021		2020		$ Change		(In millions)	2022		2021		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	200	$	449	$	(249)	Operating activities	$	621	$	200	$	421
Investing activities	Investing activities	(18)		(2,097)		2,079		Investing activities	(1,541)		(18)		(1,523)
Financing activities	Financing activities	692		1,701		(1,009)		Financing activities	392		692		(300)
Effect of exchange rate changes	Effect of exchange rate changes	(12)		(4)		(8)		Effect of exchange rate changes	(1)		(12)		11
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents		$	862	$	49	$	813
Net change in cash and cash equivalents and restricted cash and cash equivalents								Net change in cash and cash equivalents and restricted cash and cash equivalents	$	(529)	$	862	$	(1,391)

Fluctuations in operating, investing and financing cash flows from period to period ~~are~~were due to the same factors as those ~~discussed~~disclosed for Hertz above, with the exception of any cash inflows or outflows related to the ~~master loan agreement between~~repurchase of our common stock and the exercise of Public Warrants as disclosed in Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz ~~and Hertz Global.~~Global," in Part I, Item 1 of this Quarterly Report.

Equity Financing

Share Repurchase Program for Common Stock

In November 2021, Hertz Global's Board of Directors approved a share repurchase program that authorizes the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock. Between January 1, 2022 and March 31, 2022, a total of 34,964,965 shares of Hertz Global's common stock were repurchased at an average share price of $20.65 resulting in an aggregate purchase price of $722 million. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of March 31, 2022 in Part I, Item 1 of this Quarterly Report. Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.

Debt Financing

In January 2022, HVF III Series 2022-1 Notes were issued in an aggregate principal amount of $750 million. An affiliate of HVF III purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount is eliminated in consolidation.

In January 2022, HVF III Series 2022-2 Notes were issued in an aggregate principal amount of $750 million. An affiliate of HVF III purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount is eliminated in consolidation.

In January 2022, the Australian Securitization was amended to increase the aggregate maximum borrowings to AUD250 million and to extend the maturity to April 2024.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

In March 2022, HVF III Series 2022-3 Notes were issued in an aggregate principal amount of $383 million. An affiliate of HVF III purchased the Class D Notes, and as a result approximately $50 million of the aggregate principal amount is eliminated in consolidation.

In March 2022, HVF III Series 2022-4 Notes were issued in an aggregate principal amount of $667 million. An affiliate of HVF III purchased the Class D Notes, and as a result approximately $87 million of the aggregate principal amount is eliminated in consolidation.

In March 2022, HVF III Series 2022-5 Notes were issued in an aggregate principal amount of $364 million. An affiliate of HVF III purchased the Class D Notes, and as a result approximately $47 million of the aggregate principal amount is eliminated in consolidation.

In March 2022, an amendment was made to the First Lien RCF to (i) increase the aggregate committed amount from $1.3 billion to $1.5 billion, (ii) increase the sublimit for letters of credit from $1.1 billion to $1.4 billion and (iii) change the benchmark from USD LIBOR to a SOFR-based rate.

In March 2022, the Series 2021-A Notes were amended to increase the maximum principal amount from $3.0 billion to $3.2 billion.

In March 2022, Hertz U.K. Limited amended the U.K. Toyota Financing Facility to increase aggregate maximum borrowings from £10 million to £25 million and extended the maturity to October 2022.

In April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to extend the maturity to June 2024.

In April 2022, Hertz U.K. Limited amended the U.K. Financing Facility to provide for aggregate maximum borrowings of up to £120 million, for a seasonal commitment period through October 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to £100 million. Additionally, the U.K. Financing Facility was amended to extend the maturity of the aggregate maximum borrowings of £100 million to October 2023.

Substantially all of our revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of ~~our~~the lenders under ~~our~~the various credit facilities, other secured financings and asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing ~~II LP, HVF II GP Corp., Hertz Vehicle Interim Financing LLC, Hertz Vehicle Financing LLC, Rental Car Finance~~III LLC and various international subsidiaries that facilitate our international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

Refer to Note 6,5, "Debt," in Part I, Item 1 of this Quarterly Report ~~on Form 10-Q~~ for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of March 31, ~~2021.~~2022. Cash paid for interest on vehicle debt during the ~~first~~ three months ofended March 31, 2022 and 2021 was ~~$30~~$39 million ~~for interest on non-vehicle debt~~ and $69 million, ~~for interest on vehicle debt. Cash paid for interest during the first three months of 2020 was $26~~respectively. The $30 million ~~for interest on non-vehicle debt and $103 million for interest on vehicle debt. The $34 million reduction~~decrease in cash paid for vehicle debt interest is due primarily to lower average rates from the issuance of HVF III ABS Notes and the payoff and termination of HVF II debt ~~levels~~in accordance with the Plan of Reorganization in 2021. Cash paid for interest on non-vehicle debt during the three months ended March 31, 2022 and 2021 was $17 million and $30 million, respectively. The $13 million decrease in cash paid for non-vehicle debt interest is due primarily to the payoff and termination of non-vehicle debt in ~~our U.S. RAC segment.~~accordance with the Plan of Reorganization in 2021.

~~Our corporate liquidity, which excludes unused commitments under our vehicle debt, was as follows:~~

(In millions) March 31, 2021 December 31, 2020
Cash and cash equivalents $ 1,087 $ 1,096
Availability under the Senior RCF — —
Corporate liquidity $ 1,087 $ 1,096

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~Covenants~~Our available corporate liquidity, which excludes unused commitments under our vehicle debt, was as follows:



(In millions)	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	1,520	$	2,257
Availability under the First Lien RCF	1,138		925
Corporate liquidity	$	2,658	$	3,182

~~Prior to the filing~~Letters of ~~the Chapter 11 Cases, Hertz’s Leverage Ratio, as defined in the credit agreements governing the Senior RCF, the Letter of~~ Credit Facility and the Alternative Letter of Credit Facility, as of the last day of any fiscal quarter may not exceed a ratio of 3.00 to 1.00. As a result of the filing of the Chapter 11 Cases, we are currently in default under our Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, and we are in breach of the Leverage Ratio.

As ~~defined in~~of March 31, 2022, there were outstanding standby letters of credit totaling $585 million comprised primarily of $232 million issued under the ~~DIP Credit Agreement, a liquidity maintenance test is required as of each month end period.~~Term C Loan and $337 million were issued under the First Lien RCF. As of March 31, ~~2021,~~2022, there remains $13 million of capacity to issue letters of credit under the Term C Loan. Such letters of credit have been issued primarily to provide credit enhancement for our asset-backed securitization facilities, as well as to support our insurance programs and vehicle rental concessions and leaseholds. As of March 31, 2022, none of the issued letters of credit have been drawn upon.

Covenants

The First Lien Credit Agreement requires us to comply with the following financial covenant: a First Lien Ratio of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year. The financial covenant disclosed above was effective beginning in the third quarter of 2021. As of March 31, 2022, we were in compliance with the ~~liquidity maintenance test.~~First Lien Ratio.

~~Summarized Financial Information – Hertz~~In addition to financial covenants, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments. As of March 31, 2022, we were in compliance with all covenants in the First Lien Credit Agreement.

The following tables present the summarized financial information as combined for The Hertz Corporation, ("Parent”), and the Parent's subsidiaries that guarantee the Senior Notes issued by the Parent ("Guarantor Subsidiaries"). The Guarantor Subsidiaries are 100% owned by the Parent and all guarantees are full and unconditional and joint and several. Additionally, substantially all of the assets of the Guarantor Subsidiaries are pledged under the Senior Facilities and Senior Second Priority Secured Notes and the value of such assets will not be available to satisfy the claims of the unsecured creditors of Hertz until the claims of secured creditors are paid in full.

During the first quarter of 2020, we early adopted Rule 13-01 of the SEC's Regulation S-X that simplifies the existing disclosure requirements for the Guarantor Subsidiaries and allows for the simplified disclosure to be included within Part 1, Item II, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." In lieu of providing separate unaudited financial statements for the Guarantor Subsidiaries, Hertz has included the accompanying summarized financial information based on Rule 13-01 of the SEC's Regulation S-X. Management of Hertz does not believe that separate financial statements of the Guarantor Subsidiaries are material to Hertz's investors; therefore, separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented.

~~Summarized financial information for the Guarantor Subsidiaries is as follows:~~

(In millions) March 31,
2021 December 31,
2020
Due from affiliates $ 67,513 $ 67,023
Total assets 67,381 67,056
Due to affiliates(1)
53,335 54,100
Total liabilities 63,136 63,282

~~(1) Due to affiliates of $53.5 billion is classified as liabilities subject to compromise as of March 31, 2021 and December 31, 2020, respectively.~~

(In millions) Three Months Ended March 31,
2021 2020
Total revenues $ 932 $ 1,313
Income (loss) before income taxes and equity in earnings (losses) of subsidiaries(1)
144 (1,522)
Net income (loss) 144 (309)
Net income (loss) attributable to Hertz 190 (309)

~~(1)Includes $324 million and $1.6 billion of intercompany vehicle lease charges from non-guarantor subsidiaries for the three months ended March 31, 2021 and 2020, respectively.~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

Capital Expenditures

Revenue Earning Vehicles Expenditures and Disposals

The table below sets forth our revenue earning vehicles expenditures and related disposal proceeds for the periods shown:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Revenue Earning Vehicles						Cash inflow (cash outflow)	Revenue Earning Vehicles
(In millions)	(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures		(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures
2022								2022
First Quarter								First Quarter	$	(2,985)	$	1,471	$	(1,514)

2021	2021							2021
First Quarter	First Quarter	$	(1,517)	$	686	$	(831)	First Quarter	$	(1,517)	$	686	$	(831)

2020
First Quarter		$	(4,346)	$	2,212	$	(2,134)

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

The table below sets forth expenditures for revenue earning vehicles, net of disposal ~~proceeds, by segment:~~proceeds:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Three Months Ended March 31,								Cash inflow (cash outflow)	Three Months Ended March 31,
($ in millions)	($ in millions)	2021		2020		$ Change		% Change		($ in millions)	2022		2021		$ Change		% Change
U.S. Rental Car		$	(819)	$	(2,051)	$	1,232	(60)	%
International Rental Car		72		79		(7)		(9)
All Other Operations		(84)		(162)		78		(48)
Americas RAC										Americas RAC	$	(1,440)	$	(812)	$	(628)	77
International RAC										International RAC	(74)		65		(139)		NM
All other operations(1)										All other operations(1)	—		(84)		84		(100)
Total	Total	$	(831)	$	(2,134)	$	1,303	(61)		Total	$	(1,514)	$	(831)	$	(683)	82

(1) Substantially comprised of our Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

NM - Not meaningful

Revenue earning vehicle expenditures ~~decreased by $2.8~~increased approximately $1.5 billion, or ~~65%~~97%, in the first quarter of 2022 compared to the 2021 period, primarily in our Americas RAC segment, resulting from the acquisition of vehicles to meet the increased travel demand as government-imposed travel restrictions were lifted. Revenue earning vehicle disposal proceeds increased $785 million for the first quarter of ~~2021~~2022 compared to ~~2020~~the 2021 period due primarily to a reduction in vehicle purchases primarily in our U.S. RAC segment. Revenue earning vehicle proceeds decreased by $1.5 billion, or 69%, for the first quarter of 2021 compared to 2020 due primarily to fewerincreased vehicle dispositions primarily in our ~~U.S.~~Americas RAC segment.

Non-Vehicle Capital Asset Expenditures and Disposals

The table below sets forth our non-vehicle capital asset expenditures and related disposal proceeds from non-vehicle capital assets disposed of or to be disposed of for the periods shown:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Non-Vehicle Capital Assets						Cash inflow (cash outflow)	Non-Vehicle Capital Assets
(In millions)	(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures		(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures
2022								2022
First Quarter								First Quarter	$	(30)	$	1	$	(29)

2021	2021							2021
First Quarter	First Quarter	$	(9)	$	4	$	(5)	First Quarter	$	(9)	$	4	$	(5)

2020
First Quarter		$	(59)	$	23	$	(36)

~~Non-vehicle~~The table below sets forth non-vehicle capital asset expenditures, ~~decreased by $50 million, or 85%,~~net of disposal proceeds:



Cash inflow (cash outflow)	Three Months Ended March 31,
($ in millions)	2022		2021		$ Change		% Change
Americas RAC	$	(28)	$	(3)	$	(25)	NM
International RAC	(2)		—		(2)		NM
All other operations(1)	—		(1)		1		(100)
Corporate	1		(1)		2		NM
Total	$	(29)	$	(5)	$	(24)	NM

(1) Substantially comprised of our Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

NM - Not meaningful

In the first quarter of ~~2021~~2022, net expenditures for non-vehicle capital assets increased by $21 million compared to ~~2020~~the 2021 period, primarily ~~due to a reduction~~ in ~~information technology and finance transformation program costs.~~our Americas RAC segment, resulting from the restart of location refurbishment projects put on hold during the Chapter 11 Cases.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~The table below sets forth non-vehicle capital asset expenditures, net of disposal proceeds, by segment:~~

Cash inflow (cash outflow) Three Months Ended
March 31,
($ in millions) 2021 2020 $ Change % Change
U.S. Rental Car $ (2) $ (4) $ 2 (50) %
International Rental Car (1) (6) 5 (83)
All Other Operations (1) (1) — —
Corporate (1) (25) 24 (96)
Total $ (5) $ (36) $ 31 (86)

CONTRACTUAL OBLIGATIONS

During the first quarter of 2021, the Bankruptcy Court approved the rejection of certain unexpired leases comprised of 278 off airport and 26 airport locations in our U.S. RAC segment. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed in our 2020 Form 10-K.

Additionally, as a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, certain financings are subject to change following the conclusion of such proceedings. Refer to Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for debt classified as liabilities subject to compromise asAs of March 31, ~~2021 and changes to our aggregate indebtedness.~~

~~Excluding the commitments previously discussed,~~2022, there have been no material changes outside of the ordinary course of business to our known contractual obligations as set forth in the table included in Part II, Item 7 ~~"Management's Discussion~~of our 2021 Form 10-K. Changes to our aggregate indebtedness, including related interest and ~~Analysis~~terms of ~~Financial Condition and Results~~new issuances, are disclosed in Note 5, "Debt," in Part I, Item 1 of ~~Operations," included in our 2020 Form 10-K.~~this Quarterly Report.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

Indemnification Obligations

There have been no significant changes to our indemnification obligations as compared to those disclosed in Note 14, "Contingencies and Off-Balance Sheet Commitments," in Part II, Item 8 of our ~~2020~~2021 Form 10-K.

We regularly evaluate the probability of having to incur costs associated with these indemnification obligations and have accrued for expected losses that are probable and estimable.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

~~For a discussion of recent~~There have been no significant changes due to recently issued accounting pronouncements ~~see~~as compared to those disclosed in Note 2, ~~"Basis of Presentation and Recently Issued~~"Significant Accounting ~~Pronouncements,~~Policies," in Part I,II, Item 18 of ~~this Quarterly Report on~~our 2021 Form ~~10-Q.~~10-K.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this ~~Quarterly~~2021 Annual Report ~~on Form 10-Q~~ include "forward-looking statements." Forward-looking statements ~~include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include~~are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," ~~"forecasts"~~"forecasts," "guidance" or similar ~~expressions.~~expressions, and include information concerning our liquidity, our results of operations, our business strategies and other information about our business. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are ~~appropriate in these circumstances.~~appropriate. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of future performance or results and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative.

Important factors that could affect our actual results and cause them to differ materially from those expressed in forward-looking statements include, among ~~others,~~other things, those that may be disclosed from time to time in subsequent reports filed with or furnished to the SEC, those described under Item 1A, "Risk Factors," included in our ~~2020~~2021 Form 10-K and this Quarterly Report ~~on Form 10-Q~~ and the following, which were derived in part from the risks set forth in Item 1A, "Risk Factors," of our ~~2020~~2021 Form 10-K and this Quarterly ~~Report on Form 10-Q:~~Report:

•our ability to navigate the Chapter 11 process, including obtaining Bankruptcy Court approval for certain actions, complying with and operating under the requirements and constraints of the Bankruptcy Code, developing, funding and executing our business plan and continuing as a going concern;

•~~the actions and decisions of creditors, regulators and other third parties that have an interest in the Chapter 11 cases;~~

•~~our ability to effectuate the Chapter 11 plan of reorganization described in the plan support agreement with certain of our creditors;~~

•~~the impact of our delisting from the New York Stock Exchange on our stockholders;~~

•~~the value of our common stock due to the Chapter 11 process or its treatment under the Proposed Plan;~~

•~~our ability to make accurate assumptions, analyses and financial projections, which could affect successful implementation of the Proposed Plan;~~

•~~levels of travel demand, particularly with respect to business and leisure travel in the U.S. and in global markets;~~

•the length and severity of COVID-19 and the impact on our vehicle rental business as a result of travel restrictions and business closures or ~~disruptions;~~disruptions, as well as the impact on our employee retention and talent management strategies;

•the impact of ~~COVID-19~~macroeconomic conditions resulting in inflationary cost pressures resulting in labor and ~~actions taken in response to the pandemic on global~~supply chain constraints and ~~regional economies and economic factors;~~

•~~general economic uncertainty and the pace of economic recovery, including in key global markets, when COVID-19 subsides;~~increased vehicle acquisition costs, among others;

•our ability to ~~successfully restructure our substantial indebtedness or raise additional capital;~~purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other raw material supply constraints;

•the impact of the conflict between Russia and Ukraine on supply chains and raw materials for the automotive industry and uncertainty on overall consumer sentiment and travel demand, especially in Europe;

•the impact on the value of our ~~post-bankruptcy capital structure;~~non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;

•our ability to ~~remediate the material weaknesses in our internal controls over financial reporting;~~attract and retain key employees;

•~~our ability to maintain an effective employee retention~~levels of travel demand, particularly business and ~~talent management strategy and resulting changes in personnel and employee relations;~~

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

•~~the recoverability of our goodwill and indefinite-lived intangible assets when performing impairment analysis;~~

•~~our ability to dispose of vehicles~~leisure travel in the ~~used-vehicle market, use the proceeds of such sales to acquire new vehicles~~U.S. and ~~to reduce exposure to residual risk;~~

•~~actions creditors may take with respect to the vehicles used~~ in ~~the rental car operations;~~global markets;

•significant changes in the competitive environment and the effect of competition in our markets on rental volume and pricing;

•occurrences that disrupt rental activity during our peak periods;

•our ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in our rental operations accordingly;

•our ability to ~~retain customer loyalty and market share;~~

•~~increased vehicle costs due to declining value of~~implement our ~~non-program vehicles;~~

•business strategy, including our ability to ~~maintain sufficient liquidity and the availability~~implement plans to ~~us of additional or continued sources of financing for our revenue earning vehicles~~support a large scale electric vehicle fleet and to ~~refinance our existing indebtedness;~~

•~~risks related to our indebtedness, including our substantial amount of debt, our ability to incur substantially more debt,~~play a central role in the ~~fact that substantially all of our consolidated assets secure certain of our outstanding indebtedness and increases in interest rates or in our borrowing margins;~~

•~~our ability to meet the financial and other covenants contained in our DIP Credit Agreement and certain asset-backed and asset-based arrangements;~~

•~~our ability to access financial markets, including the financing of our vehicle fleet through the issuance of asset-backed securities;~~

•~~fluctuations in interest rates, foreign currency exchange rates and commodity prices;~~

•~~our ability to sustain operations during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease);~~

•~~our ability to prevent the misuse or theft of information we possess, including as a result of cyber security breaches and other security threats;~~modern mobility ecosystem;

•our ability to adequately respond to changes in technology, customer demands and market competition;

•the mix of program and non-program vehicles in our ~~ability~~fleet can lead to ~~successfully implement any strategic transactions;~~increased exposure to residual risk;

•our ability to ~~achieve anticipated cost savings from on-going strategic initiatives, which could have an effect on our business operations, results~~dispose of ~~operations and financial condition;~~

•~~our ability to purchase adequate supplies of competitively priced~~ vehicles ~~and risks relating to the availability and increases~~ in the ~~cost~~used-vehicle market and use the proceeds of ~~the vehicles we purchase as a result~~such sales to acquire new vehicles;

Table of ~~the continuing chip manufacturing shortage;~~Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

•

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~our recognition of previously deferred tax gains on the disposition of revenue earning vehicles;~~

•financial instability of the manufacturers of our vehicles, which could impact their ability to fulfill obligations under repurchase or guaranteed depreciation programs;

•an increase in our vehicle costs or disruption to our rental activity ~~particularly during our peak periods,~~ due to safety recalls by the manufacturers of our vehicles;

•~~our ability to execute a business continuity plan;~~

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~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

•our access to third-party distribution channels and related prices, commission structures and transaction volumes;

•our ability to offer an excellent customer experience, retain and increase customer loyalty and market share;

•risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anticorruption or antibribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;

•~~a major disruption in our communication or centralized information networks;~~

•~~a failure to maintain, upgrade and consolidate our information technology systems;~~

•~~costs and risks associated with potential litigation and investigations or any failure or inability to comply with laws and regulations or any changes in the legal and regulatory environment;~~

•our ability to maintain our network of leases and vehicle rental concessions at airports in the U.S. and internationally;

•our ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;

•major disruption in our communication or centralized information networks or a failure to maintain, upgrade and consolidate our information technology systems;

•our ability to prevent the misuse or theft of information we possess, including as a result of cyber security breaches and other security threats, as well as our ability to comply with privacy regulations;

•risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;

•our ability to utilize our net operating loss carryforwards;

•risks relating to tax laws, including those that affect our ability to deduct certain business interest expenses and offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;

•changes in ~~the existing, or the adoption of new~~ laws, regulations, policies or other activities of governments, agencies and similar organizations, ~~where such actions may~~including those related to accounting principles, that affect our operations, ~~the cost thereof~~our costs or applicable tax rates;

•~~risks relating to~~the recoverability of our ~~deferred tax~~goodwill and indefinite-lived intangible assets ~~including the risk of an "ownership change" under the Internal Revenue Code of 1986, as amended;~~when performing impairment analysis;

•~~our exposure to uninsured claims in excess of historical levels;~~

•costs and risks ~~relating to our participation in multiemployer pension plans;~~

•~~shortages of fuel~~associated with potential litigation and ~~increases or volatility in fuel costs;~~

•~~our ability to manage our relationships~~investigations, compliance with ~~unions;~~

•and changes in ~~accounting principles, or their application or interpretation,~~laws and ~~our ability to make accurate estimates~~regulations and ~~the assumptions underlying the estimates, which could have an effect on operating results;~~potential exposures under environmental laws and regulations; and

•~~other risks~~the availability of additional or continued sources of financing for our revenue earning vehicles and ~~uncertainties described from time~~ to ~~time in periodic and current reports that we file with the SEC.~~refinance our existing indebtedness.

You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Quarterly Report ~~on Form 10-Q,~~ and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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~~(DEBTORS-IN-POSSESSION)~~

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks, including the effects of changes in interest rates (including credit spreads), foreign currency exchange rates and fluctuations in fuel prices. We manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments.

As a result of our declining credit profile from the impact from COVID-19, we are no longer able to enter into certain derivative financial instruments or renew existing derivative financial instruments in order to mitigate market risks arising from the effects of changes in foreign currency exchange rates and interest rates (including credit spreads). As a result, we have exposure to foreign currency exchange rate fluctuations on cross currency obligations, primarily intercompany loans. Assuming a hypothetical change of one percentage point to the foreign currency exchange rates on our intercompany loan balance as of March 31, 2021, our pre-tax operating results would increase (decrease) by approximately $3 million.

~~Except for the effects described above and the impact from COVID-19 on the global economy, there~~There have been no ~~other~~ material changes to the information reported under Part II, Item 7A ~~"Quantitative and Qualitative Disclosures About Market Risk," in~~of our ~~2020~~2021 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

HERTZ GLOBAL

Evaluation of Disclosure Controls and Procedures

Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly ~~Report on Form 10-Q.~~Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, ~~2021, due to the identification of a material weakness in~~2022, our ~~internal control over financial reporting, as further described in Item 9A of our 2020 Form 10-K, the Company’s~~ disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.effective.

Changes in Internal Control over Financial Reporting

~~During~~There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, ~~2021, we have taken, and continue to take, the actions described below to remediate our existing information technology general controls (“ITGCs”) material weakness, which have~~2022 that materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

Our remediation efforts to address the material weakness associated with ITGCs, as further described in Item 9A of our 2020 Form 10-K, are ongoing. Management performed the following remediation actions during the three months ended March 31, 2021:

•Clarified and communicated roles for ITGC control owners and SOX project management team through confirming the identification of each control owner, reinforcing requirements and creating a culture of accountability to enforce the compliance of ITGCs.

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~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)~~

•~~Began administering enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.~~

•Enhanced monitoring of ITGC design and operational effectiveness through implementing monthly remediation progress status dashboards with the Chief Information Officer and Chief Financial Officer, which is summarized quarterly to the Audit Committee of the Board of Directors.

Our remediation efforts were ongoing during the three months ended March 31, 2021. To remediate our existing material weakness, we require additional time to complete the implementation of our remediation plans and demonstrate the effectiveness of our remediation efforts. The material weakness cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

HERTZ

Evaluation of Disclosure Controls and Procedures

Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly ~~Report on Form 10-Q.~~Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, ~~2021, due to the identification of a material weakness in~~2022, our ~~internal control over financial reporting, as further described in Item 9A of our 2020 Form 10-K, the Company’s~~ disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us int eh reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.effective.

Changes in Internal Control over Financial Reporting

•~~Began administering enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.~~

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~~(DEBTORS-IN-POSSESSION)~~

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Information related to the Chapter 11 Cases that were filed on May 22, 2020 is included in Note 1, "Background," in Part 1, Item 1 of this Quarterly Report on Form 10-Q.~~

For a description of certain pending legal proceedings see Note 12, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly ~~Report on Form 10-Q.~~Report.

ITEM 1A. RISK FACTORS

Part I, Item 1A~~“Risk Factors,”~~ of our ~~2020~~2021 Form 10-K for the year ended December 31, ~~2020,~~2021, includes certain risk factors that could materially affect our business, financial condition or future results. There have been no material changes in those risk factors, except as listed below:

~~As a result of the Chapter 11 Cases, we are subject~~Risks Related to ~~the risks and uncertainties associated with Chapter 11 Cases and operating under Chapter 11 may restrict~~ our ~~ability to pursue strategic and operational initiatives.~~Business

For the duration of the Chapter 11 Cases, our operations and our ability to execute our business strategy will be subject to the risks and uncertainties associated with bankruptcy. These risks include:

•~~our ability to obtain Bankruptcy Court approval with respect to motions filed in the Chapter 11 Cases from time to time;~~

•our ability to comply with and operate under the requirements and constraints of the Bankruptcy Code and under any cash management, cash collateral, adequate protection, or other orders entered by the Bankruptcy Court from time to time;

•our ability to engage in intercompany transactions and to fund operations from cash on hand or from financings and, in the event of such financings, our ability to comply with the terms of such financings;

•~~our ability to receive Bankruptcy Court approval of the Proposed Plan and our ability to consummate the Proposed Plan, each on an acceptable timeline;~~

•~~our ability to develop, fund, and execute our business plan; and~~

•~~our ability to continue as a going concern.~~

These risks and uncertainties could affect our business and operations in various ways. For example, negative events or publicity associated with the Chapter 11 Cases could adversely affect our relationships with our suppliers, customers and employees. In particular, critical vendors, suppliers, and/or customers may determine not to do business with us due to the Chapter 11 Cases and we may not be successful in securing alternative sources. Also, transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond timely to certain events or take advantage of opportunities. Additionally, uncertainty with respect to intercompany transactions may negatively impact our captive insurance companies’ ability to meet insurance regulatory requirements. Because of the risks and uncertainties associated with the Chapter 11 Cases, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 process may have on ourOur business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and ~~there is no certainty as to our ability to continue as a going concern.~~Ukraine.

~~We may not be able to obtain Bankruptcy Court confirmation~~The global economy has been negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the U.S., United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. Shortages in materials and increased costs for transportation, energy, and raw material, as well as uncertainty on overall consumer sentiment and travel demand, especially in Europe, are some of the ~~Proposed Plan or may have to modify the terms~~negative impacts of the ~~Proposed Plan.~~

~~The Proposed Plan,~~Russia-Ukraine military conflict on the global economy. In particular, shortages and increased costs relating to raw materials extracted from, or components produced in, Russia and/or Ukraine, which ~~we filed with~~are important to the ~~Bankruptcy Court, is subject~~vehicle manufacturing industry including the production of electric vehicle batteries, may impact vehicle production volumes, delivery schedules and costs. Further escalation of geopolitical tensions related to ~~approval by each class of holders of claims and interests entitled to vote. Even if they approve~~ the ~~Proposed Plan, the Bankruptcy Court, which, as a~~

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~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 1A. RISK FACTORS (CONTINUED)~~

~~court of equity, may exercise substantial discretion, may choose not to confirm the Proposed Plan. Bankruptcy Code Section 1129 requires,~~military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, ~~a showing that confirmation of the Proposed Plan will not be followed by liquidation or the need for further financial reorganization for us,~~cyberattacks, supply disruptions, lower consumer demand, and that the value of distributions to dissenting holders of claims and interests will not be less than the value such holders would receive if we, the Debtors, liquidated under Chapter 7 of the Bankruptcy Code. Although we believe that the Proposed Plan will satisfy such tests, there can be no assurance that the Bankruptcy Court will reach the same conclusion or that modifications to the Proposed Plan will not be required for confirmation or that such modifications would not necessitate re-solicitation of votes.

~~Our post-bankruptcy capital structure is yet to be confirmed, and any~~ changes to ~~our capital structure may have a material adverse effect on existing debt~~foreign exchange rates and ~~equity security holders.~~

Our post-bankruptcy capital structure has yet to be confirmed and will be set pursuant to a plan that requires Bankruptcy Court approval. The reorganization of our capital structure may include exchanges of new debt or equity securities for our existing debt, equity securities, and claims against us. Such new debt may be issued at different interest rates, payment schedules and maturities than our existing debt securities. Existing equity securities are subject to a high risk of being cancelled. We have negotiated the Proposed Plan with our creditors and have selected a group of private equity sponsors to provide the equity capital to fund our exit from Chapter 11. Under the Proposed Plan and the terms of the sponsors’ proposed investment, our existing equity will be extinguished and cancelled, and holders of our existing common stock will be entitled to warrants exercisable for equity in the reorganized entity. The success of a reorganization through any such exchanges or modifications will depend on approval by the Bankruptcy Court and the willingness of existing debt and equity security holders to agree to the exchange or modification, subject to the provisions of the Bankruptcy Code, and there can be no guarantee of success. If such exchanges or modifications are successful, holders of our debt or of claims against us may find their holdings no longer have any value or are materially reduced in value, or they may be converted to equity and be diluted or may be modified or replaced by debt with a principal amount that is less than the outstanding principal amount, longer maturities and reduced interest rates. While holders of our existing common stock are expected to be entitled to certain rights pursuant to the Proposed Plan, there is no guarantee that the plan will be approved or consummated and that any equity recovery will be realized. There can be no assurance that any new debt or equity securities will maintain their value at the time of issuance.

~~If our existing Plan Support Agreement is terminated, our ability to confirm and consummate the Proposed Plan could be materially and adversely affected.~~

We have executed and entered into a Plan Support Agreement with our plan sponsors pursuant to which the parties thereto have agreed to take certain actions to support the prosecution and consummation of the Proposed Plan on the terms and conditions set forth in the Plan Support Agreement. The Plan Support Agreement contains a number of termination events, upon the occurrence of which certain parties to the Plan Support Agreement may terminate the agreement. If the Plan Support Agreement is terminated as to all parties thereto, each of the parties thereto will be released from its obligations in accordance with the terms of the Plan Support Agreement. Such termination may result in the loss of support for the Proposed Plan by the parties to the Plan Support Agreement, which could adversely affect our ability to confirm and consummate the Proposed Plan. If the Proposed Plan is not consummated following termination of the Plan Support Agreement, there can be no assurance that the Chapter 11 Cases would not be converted to Chapter 7 liquidation cases or that any new Chapter 11 plan would be as favorable to holders of claims against us as contemplated by the Plan Support Agreement.

The Proposed Plan is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, or adverse market conditions persist or worsen, the Proposed Plan may be unsuccessful in its execution.

The Proposed Plan reflects assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we consider appropriate under the circumstances. Whether actual future results and developments will be consistent with our expectations and

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~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 1A. RISK FACTORS (CONTINUED)~~

~~assumptions depends on a number of factors, including but not limited to the overall strength and stability of general economic conditions, both in the U.S. and in global markets. The failure of~~financial markets, any of ~~these factors could materially adversely affect the successful reorganization of our businesses.~~

In addition, the Proposed Plan relies upon financial projections. Financial forecasts are necessarily speculative, and it is likely that one or more of the assumptions and estimates that are the basis of these financial forecasts will not be accurate. In our case, the forecasts will be even more speculative than normal, because they involve fundamental changes in the nature of our capital structure. Additionally, the impact of the COVID-19 pandemic on the travel industry in general, and on us, make it even more challenging than usual to develop forecasts on business. Accordingly, we expect that our actual financial condition and results of operations will differ, perhaps materially, from what we have anticipated. Consequently, there can be no assurance that the results or developments contemplated by any plan of reorganization we may implement will occur or, even if they do occur, that they will have the anticipated effects on us and our subsidiaries or our businesses or operations. The failure of any such results or developments to materialize as anticipated could materially adversely affect the successful implementation of the Proposed Plan.

~~The continuing semiconductor microchip manufacturing shortage may be disruptive to our vehicle rental business and~~which may adversely affect our business ~~results of operations~~ and ~~financial condition.~~

Increased demand for semiconductor microchips ("Chips") in 2020, due in part to COVID-19 and an increased use of electronic equipment that use these Chips, has resulted in a severe shortage of Chips in early 2021. These same Chips and microprocessors are used in a variety of automobile parts, includingfurther exacerbate supply chain issues in the ~~control of engines and transmissions. As a result, various~~ automotive ~~manufacturers have been forced to delay or stall new vehicle production. If efforts to address~~industry. In addition, the shortage of Chips by the industry and government entities are unsuccessful, there may be further delays in new vehicle production. Consequently, there is no guarantee that we can purchase a sufficient number of new vehicles at competitive prices and on competitive terms and conditions. If we are unable to obtain a sufficient supply of new vehicles, or if we obtain less favorable pricing and other terms during the acquisition of vehicles and are unable to recover from the increased costs then our results of operations, financial condition, liquidity and cash flows may be materially adversely affected. If we are unable to purchase new vehicles at competitive prices, increased maintenance costs in relation to our existing fleet may put further pressure on our results of operations and financial condition.

~~The continued uncertainty about the duration~~effects of the ~~negative impact from COVID-19~~ongoing conflict could heighten many of our known risks described in Part I, Item 1A, "Risk Factors" in our ~~industry may disrupt our employee retention and talent management strategies and affect our business operations.~~

We develop and maintain a talent management strategy that defines current and future talent requirements (e.g., experience, skills, location requirements, timing, etc.) based on our strategic direction, coordinated recruiting and development plans across businesses and regions and considers employee mobility, centers of excellence and shared service concepts to optimize resource plans and leverage labor arbitrage.

COVID-19 has created uncertainty with respect to the return to the workforce which affects our employee retention and talent management strategies. We cannot predict with certainty how the post-COVID return to workforce measures will affect our employee retention and talent management strategies. The consequences that may result from continued disruptions or a failure of our employee retention and talent management strategies can include inadequate staffing levels, inability to support bankruptcy and emergence strategy, lack of key talent, declining product quality and competitive differentiation, or eroding employee morale and productivity.

We expect substantial cost savings from our ongoing strategic initiatives, and if we are unable to achieve these cost savings, or sustain our current cost structure, it could have a material adverse effect on our business operations, results of operations and financial condition.

We have not yet realized all of the cost savings we expect to achieve from our ongoing strategic initiatives. A variety of risks could cause us not to realize the expected cost savings, including but not limited to, higher than expected

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~~(DEBTORS-IN-POSSESSION)~~

~~ITEM 1A. RISK FACTORS (CONTINUED)~~

severance costs; higher than expected retention costs for continuing employees; higher than expected stand-alone overhead expenses; delays in the anticipated timing of activities related to our cost-savings plans; and other unexpected disruptions to our business.

2021 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~The following table provides a breakdown of our equity security repurchases during the first quarter of 2022.


	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of the publicly announced plan or program	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the publicly announced plan or program (In thousands)
Common Stock
January 1 – January 31, 2022	12,238,858	$	21.65	12,238,858	$	1,327,418
February 1 – February 28, 2022	12,271,099	$	19.59	12,271,099	$	1,087,000
March 1 – March 31, 2022	10,455,008	$	20.71	10,455,008	$	870,466
Total	34,964,965	$	20.65	34,964,965	$	870,466

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a)Exhibits:

The attached list of exhibits in the "Exhibit Index" immediately following the signature page to this Quarterly Report ~~on Form 10-Q~~ is filed as part of this Quarterly Report ~~on Form 10-Q~~ and is incorporated herein by reference in response to this item.

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~~(DEBTORS-IN-POSSESSION)~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


Date:	~~May 7, 2021~~April 27, 2022	HERTZ GLOBAL HOLDINGS, INC. THE HERTZ CORPORATION (Registrants)
		By:	/s/ KENNY CHEUNG
			Kenny Cheung Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX


Exhibit Number		Description










10.1	Hertz Holdings Hertz	~~Plan Support Agreement,~~Series 2022-3 Supplement, dated as of ~~April 3,~~March 30, 2021, ~~(Incorporated~~among Hertz Vehicle FinancingIII LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.1 to the Current Report ~~on Form 8-K~~ of Hertz Global Holdings, Inc. (File No. 001-37665) and The Hertz Corporation (File No. 001-07541), as filed on April ~~7, 2021)~~1, 2022).
10.2	Hertz Holdings Hertz	~~Equity Purchase and Commitment Agreement,~~Series 2022-4 Supplement, dated as of ~~April 3,~~March 30, 2021, ~~(Incorporated~~among Hertz Vehicle FinancingIII LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit ~~10.2~~10.2 to the Current Report ~~on Form 8-K~~ of Hertz Global Holdings, Inc. (File No. 001-37665) and The Hertz Corporation (File No. 001-07541), as filed on April ~~7, 2021)~~1, 2022).
10.3	Hertz Holdings Hertz	~~Joinder Agreement,~~Series 2022-5 Supplement, dated as of ~~April 14, 2021(Incorporated~~March 30, 2021, among Hertz Vehicle FinancingIII LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit ~~10.1~~10.3 to the Current Report ~~on Form 8-K~~ of Hertz Global Holdings, Inc. (File No. 001-37665) and The Hertz Corporation (File No. 001-07541), as filed on April ~~19, 2021)~~1, 2022).
2210.4	Hertz Holdings Hertz	~~List~~Amendment No. 1 dated August 3, 2021 to Credit Agreement dated June 30, 2021, by and among THC and the subsidiary borrowers party thereto as borrowers, the several lenders and issuing lenders from time to time parties thereto, and Barclays Bank PLC, as administrative agent and collateral agent.*
10.5	Hertz Holdings Hertz	Amendment No. 2 dated November 23, 2021 to Credit Agreement dated June 30, 2021, by and among THC and the subsidiary borrowers party thereto as borrowers, the several lenders and issuing lenders from time to time parties thereto, and Barclays Bank PLC, as administrative agent and collateral agent.*
10.6	Hertz Holdings Hertz	Amendment No. 3 dated March 31, 2022 to Credit Agreement dated June 30, 2021, by and among THC and the subsidiary borrowers party thereto as borrowers, the several lenders and issuing lenders from time to time parties thereto, and Barclays Bank PLC, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.4 to the Current Report of ~~Guarantor Subsidiaries~~Hertz Global Holdings, Inc. (File No. 001-37665) and The Hertz Corporation (File No. 001-07541), as filed on April 1, 2022).
10.7	Hertz Holdings Hertz	Employment Agreement, dated as of February 3, 2022, between Hertz Global Holdings, Inc., and Stephen M. Scherr.* †
31.1	Hertz Holdings	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.2	Hertz Holdings	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.3	Hertz	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.4	Hertz	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).*
32.1	Hertz Holdings	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.**
32.2	Hertz Holdings	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.**
32.3	Hertz	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.**
32.4	Hertz	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.**
101.INS	Hertz Holdings Hertz	InIine XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Calculation Linkbase Document*

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EXHIBIT INDEX (Continued)


Exhibit Number		Description
101.DEF	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104	Hertz Holdings Hertz	Cover Page Interactive Data File (Embedded within the Inline XBRL document)

______________________________________________________________________________

† Indicates management contract or compensatory plan or arrangement.

*Filed herewith

**Furnished herewith

Note: Certain instruments with respect to various additional obligations, which could be considered as long-term debt, have not been filed as exhibits to this Report because the total amount of securities authorized under any such instrument does not exceed 10% of our total assets on a consolidated basis. We agree to furnish to the SEC upon request a copy of any such instrument defining the rights of the holders of such long-term debt.

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		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	1
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4134
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6655
ITEM 4.	Controls and Procedures	6655
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	6856
ITEM 1A.	Risk Factors	6856
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7156
ITEM 3.	Defaults Upon Senior Securities	7156
ITEM 5.	Other Information	7157
ITEM 6.	Exhibits	7157
SIGNATURE		7258
EXHIBIT INDEX		7359


(In millions)	Outstanding Principal
Senior Notes	March 31, 2021		December 31, 2020
6.250% Senior Notes due October 2022	$	500	$	500
5.500% Senior Notes due October 2024	800		800
7.125% Senior Notes due August 2026	500		500
6.000% Senior Notes due January 2028	900		900
	$	2,700	$	2,700


(In millions)	Outstanding Principal
European Vehicle Notes	March 31, 2021		December 31, 2020
4.125% Senior Notes due October 2021	$	265	$	276
5.500% Senior Notes due March 2023	588		612
	$	853	$	888


	March 31, 2021				As of December 31, 2020
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(1)	$	5,313	$	5,316	$	4,747	$	3,382
Vehicle Debt	6,340		6,254		6,087		6,021
Total	$	11,653	$	11,570	$	10,834	$	9,403