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		~~September~~June 30, ~~2020~~2021
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 value $0.01 per share

~~HTZ~~HTZZ

~~New York Stock Exchange~~*

The Hertz Corporation

None

*~~On October 29, 2020,~~ Hertz Global Holdings, Inc. ~~("Hertz Global") received notification from the New York Stock Exchange ("NYSE") that Hertz Global's~~'s common stock is no longer suitable for listing on the NYSE and that the NYSE suspended trading in Hertz Global's common stock after the market close on October 29, 2020. On October 30, 2020, the NYSE applied to the Securities and Exchange Commission pursuant to Form 25 to remove the common stock of Hertz Global from listing and registration on the NYSE at the opening of business on November 10, 2020. Upon deregistration of Hertz Global's common stock under Section 12(b) of the Exchange Act, Hertz Global's common stock will remain registered under Section 12(g) of the Exchange Act. As a result of the suspension and expected delisting, Hertz Global's common stock began trading exclusivelytrades on the over-the-counter market ~~on October 30, 2020~~ under the symbol ~~HTZGQ.~~HTZZ.

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 ☐

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.

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation 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

~~November~~August 2, ~~2020~~2021

Hertz Global Holdings, Inc.

Common Stock,

par value $0.01 per share

~~156,206,478~~471,432,062

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 ~~September~~ June 30 ~~2020~~, 2021 and December 31, ~~2019~~2020		2
Condensed Consolidated Statements of Operations for the Three and Six ~~Nine~~Months Ended S e ~~ptember~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~		3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six ~~Nine~~Months Ended ~~September~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~		4
Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~		5
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30 ~~30,~~, 2021 and 2020 ~~and 2019~~		76
The Hertz Corporation and Subsidiaries ~~(Debtor-in-Possession)~~
Condensed Consolidated Balance Sheets as of ~~September~~June 30 ~~30, 2020~~, 2021 and December 31, ~~2019~~2020		98
Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~		109
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six N ~~ine~~Months Ended ~~September~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~		1110
Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three and Six N ~~ine~~Months Ended ~~September~~June 30 ~~30,~~, 2021 and 2020 ~~and 2019~~		1211
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30 ~~2020~~, 2021 and ~~2019~~2020		1412
Notes to the Condensed Consolidated Financial Statements
Note 1	Background	1614
Note 2	Basis of Presentation and Recently Issued Accounting Pronouncements	2016


Note 3	Divestitures	2218
Note 4	Revenue Earning Vehicles	2318
Note 5	Goodwill and Intangible Assets, Net	2318
Note 6	Debt	2419
Note 7	Leases	3328
Note 8	Restructuring	3429
Note 9	Income Tax (Provision) Benefit	3530
Note 101 0	Equity and Earnings (Loss) Per Share -– Hertz Global	3631
Note 111 1	~~Employee Retirement Benefits~~Public Warrants – Hertz Global	3734

Note 1 2	Stock-Based Compensation	34
Note 121 3	Fair Value Measurements	3735
Note 131 4	Contingencies and Off-Balance Sheet Commitments	3837
Note 141 5	Related Party Transactions	4039
Note 151 6	Segment Information	4240

Note 1617	Liabilities Subject to Compromise	4644
Note 171 8	Reorganization Items, Net	4644
~~Note 18~~	~~Condensed Combined Debtor-in-Possession Financial Information~~	46

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)


		September 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,137	$	865	Cash and cash equivalents	$	1,820	$	1,096
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	382		466		Vehicle	247		50
Non-vehicle	Non-vehicle	363		29		Non-vehicle	628		361
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	745		495		Total restricted cash and cash equivalents	875		411
Total cash, cash equivalents, restricted cash and restricted cash equivalents	Total cash, cash equivalents, restricted cash and restricted cash equivalents	1,882		1,360		Total cash, cash equivalents, restricted cash and restricted cash equivalents	2,695		1,507
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	629		791		Vehicle	87		164
Non-vehicle, net of allowance of $63 and $35, respectively		787		1,049
Non-vehicle, net of allowance of $58 and $46, respectively						Non-vehicle, net of allowance of $58 and $46, respectively	937		613
Total receivables, net	Total receivables, net	1,416		1,840		Total receivables, net	1,024		777
Prepaid expenses and other assets	Prepaid expenses and other assets	429		689		Prepaid expenses and other assets	1,184		373
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	11,462		17,085		Vehicles	9,563		7,540
Less: accumulated depreciation	Less: accumulated depreciation	(3,011)		(3,296)		Less: accumulated depreciation	(1,573)		(1,478)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	8,451		13,789		Total revenue earning vehicles, net	7,990		6,062
Property and equipment, net	Property and equipment, net	699		757		Property and equipment, net	618		666
Operating lease right-of-use assets	Operating lease right-of-use assets	1,737		1,871		Operating lease right-of-use assets	1,504		1,675
Intangible assets, net	Intangible assets, net	3,062		3,238		Intangible assets, net	2,947		2,992
Goodwill	Goodwill	1,081		1,083		Goodwill	1,045		1,045
Assets held for sale						Assets held for sale	0		1,811
Total assets(a)	Total assets(a)	$	18,757	$	24,627	Total assets(a)	$	19,007	$	16,908
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY						LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	84	$	289	Vehicle	$	93	$	29
Non-vehicle	Non-vehicle	501		654		Non-vehicle	687		389
Total accounts payable	Total accounts payable	585		943		Total accounts payable	780		418
Accrued liabilities	Accrued liabilities	810		1,032		Accrued liabilities	945		759
Accrued taxes, net	Accrued taxes, net	119		150		Accrued taxes, net	232		121
Debt:	Debt:					Debt:
Vehicle	Vehicle	8,753		13,368		Vehicle	7,035		6,024
Non-vehicle	Non-vehicle	18		3,721		Non-vehicle	1,514		243
Total debt	Total debt	8,771		17,089		Total debt	8,549		6,267
Public Warrants						Public Warrants	800		0
Operating lease liabilities	Operating lease liabilities	1,703		1,848		Operating lease liabilities	1,459		1,636
Self-insured liabilities	Self-insured liabilities	481		553		Self-insured liabilities	459		488
Deferred income taxes, net	Deferred income taxes, net	887		1,124		Deferred income taxes, net	711		730
Total liabilities not subject to compromise	Total liabilities not subject to compromise	13,356		22,739		Total liabilities not subject to compromise	13,935		10,419
Liabilities subject to compromise	Liabilities subject to compromise	5,001		0		Liabilities subject to compromise	0		4,965
Liabilities held for sale						Liabilities held for sale	0		1,431
Total liabilities(a)	Total liabilities(a)	18,357		22,739		Total liabilities(a)	13,935		16,815
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
Mezzanine Equity:						Mezzanine Equity:
Preferred stock, $0.01 par value, 1,500,000 shares issued and outstanding at June 30, 2021						Preferred stock, $0.01 par value, 1,500,000 shares issued and outstanding at June 30, 2021	1,433		0
Total mezzanine equity						Total mezzanine equity	1,433		0
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, $0.01 par value, 0 shares issued and outstanding		0		0
Common stock, $0.01 par value, 158,235,410 and 144,153,444 shares issued, respectively and 156,206,478 and 142,124,512 shares outstanding, respectively		2		1
Preferred stock, $0.01 par value, 0 shares issued and outstanding at June 30, 2021 and December 31, 2020						Preferred stock, $0.01 par value, 0 shares issued and outstanding at June 30, 2021 and December 31, 2020	0		0
Common stock, $0.01 par value, 471,102,462 shares issued and outstanding at June 30, 2021, and 158,235,410 and 156,206,478 shares issued and outstanding at December 31, 2020						Common stock, $0.01 par value, 471,102,462 shares issued and outstanding at June 30, 2021, and 158,235,410 and 156,206,478 shares issued and outstanding at December 31, 2020	5		2
Treasury stock, at cost, 2,028,932 shares at December 31, 2020						Treasury stock, at cost, 2,028,932 shares at December 31, 2020	0		(100)
Additional paid-in capital	Additional paid-in capital	3,047		3,024		Additional paid-in capital	6,476		3,047
Accumulated deficit		(2,392)		(967)
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	(2,659)		(2,681)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(216)		(189)		Accumulated other comprehensive income (loss)	(202)		(212)
Treasury stock, at cost, 2,028,932 and 2,028,932 shares, respectively		(100)		(100)
Stockholders' equity attributable to Hertz Global	Stockholders' equity attributable to Hertz Global	341		1,769		Stockholders' equity attributable to Hertz Global	3,620		56
Noncontrolling interests	Noncontrolling interests	59		119		Noncontrolling interests	19		37
Total stockholders' equity	Total stockholders' equity	400		1,888		Total stockholders' equity	3,639		93
Total liabilities and stockholders' equity		$	18,757	$	24,627
Total liabilities, mezzanine equity and stockholders' equity						Total liabilities, mezzanine equity and stockholders' equity	$	19,007	$	16,908

(a)Hertz Global Holdings, Inc.'s consolidated total assets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 include total assets of variable interest entities (“VIEs”) of ~~$705~~$808 million and ~~$1.3 billion,~~$511 million, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 include total liabilities of VIEs of ~~$647~~$694 million and ~~$1.1 billion,~~$475 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, "Debt," and "767 Auto Leasing LLC" in Note ~~14,~~15, "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 September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			Three Months Ended June 30,				Six Months Ended June 30,
Revenues:
Worldwide vehicle rental		$	1,119	$	2,664	$	3,535	$	6,961
All other operations		149		172		488		493
Total revenues		1,268		2,836		4,023		7,454
											2021		2020		2021		2020

Revenues										Revenues	$	1,873	$	832	$	3,161	$	2,755
Expenses:	Expenses:									Expenses:
Direct vehicle and operating	Direct vehicle and operating	832		1,492		2,777		4,147		Direct vehicle and operating	946		652		1,724		1,845
Depreciation of revenue earning vehicles and lease charges	Depreciation of revenue earning vehicles and lease charges	347		667		1,634		1,892		Depreciation of revenue earning vehicles and lease charges	116		609		359		1,285
Non-vehicle depreciation and amortization										Non-vehicle depreciation and amortization	50		57		104		110
Selling, general and administrative	Selling, general and administrative	143		232		519		723		Selling, general and administrative	172		164		321		368
Interest expense, net:	Interest expense, net:									Interest expense, net:
Vehicle	Vehicle	110		134		360		372		Vehicle	98		132		202		250
Non-vehicle (excludes contractual interest of $53 million and $75 million for the three and nine months ended September 30, 2020, respectively)		17		70		118		214
Non-vehicle (excludes contractual interest of $22 million for the three and six months ended June 30, 2020)										Non-vehicle (excludes contractual interest of $22 million for the three and six months ended June 30, 2020)	91		44		135		101
Total interest expense, net	Total interest expense, net	127		204		478		586		Total interest expense, net	189		176		337		351
Technology-related intangible and other asset impairments	Technology-related intangible and other asset impairments	0		0		193		0		Technology-related intangible and other asset impairments	0		193		0		193
Other (income) expense, net	Other (income) expense, net	0		(6)		(15)		(37)		Other (income) expense, net	(10)		2		(13)		(15)
Reorganization items, net	Reorganization items, net	78		0		101		0		Reorganization items, net	633		23		677		23
(Gain) from the sale of a business										(Gain) from the sale of a business	(8)		0		(400)		0
Total expenses	Total expenses	1,527		2,589		5,687		7,311		Total expenses	2,088		1,876		3,109		4,160
Income (loss) before income taxes	Income (loss) before income taxes	(259)		247		(1,664)		143		Income (loss) before income taxes	(215)		(1,044)		52		(1,405)
Income tax (provision) benefit	Income tax (provision) benefit	36		(74)		232		(78)		Income tax (provision) benefit	46		192		(33)		196
Net income (loss)	Net income (loss)	(223)		173		(1,432)		65		Net income (loss)	(169)		(852)		19		(1,209)
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	1		(4)		7		(4)		Net (income) loss attributable to noncontrolling interests	1		5		2		6
Net income (loss) attributable to Hertz Global	Net income (loss) attributable to Hertz Global	$	(222)	$	169	$	(1,425)	$	61	Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Weighted-average shares outstanding:	Weighted-average shares outstanding:									Weighted-average shares outstanding:
Basic	Basic	156		133		148		109		Basic	160		144		158		143
Diluted	Diluted	156		134		148		109		Diluted	160		144		158		143
Earnings (loss) per share:	Earnings (loss) per share:									Earnings (loss) per share:
Basic earnings (loss) per share	Basic earnings (loss) per share	$	(1.42)	$	1.26	$	(9.65)	$	0.56	Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	Diluted earnings (loss) per share	$	(1.42)	$	1.26	$	(9.65)	$	0.56	Diluted earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)

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
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Net income (loss) $ (223) $ 173 $ (1,432) $ 65
Other comprehensive income (loss):
Foreign currency translation adjustments (6) (13) (32) (11)
Net gain (loss) on defined benefit pension plans 15 1 1 1
Reclassification to other (income) expense for amortization of actuarial (gains) losses on defined benefit pension plans 1 2 6 5
Total other comprehensive income (loss) before income taxes 10 (10) (25) (5)
Income tax (provision) benefit related to net gains and losses on defined benefit pension plans (4) 0 0 0
Income tax (provision) benefit related to reclassified amounts of net periodic costs on defined benefit pension plans (1) (1) (2) (1)
Total other comprehensive income (loss) 5 (11) (27) (6)
Total comprehensive income (loss) (218) 162 (1,459) 59
Comprehensive (income) loss attributable to noncontrolling interests 1 (4) 7 (4)
Comprehensive income (loss) attributable to Hertz Global $ (217) $ 158 $ (1,452) $ 55



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	(169)	$	(852)	$	19	$	(1,209)
Other comprehensive income (loss):
Foreign currency translation adjustments	(7)		15		10		(26)
Net gain (loss) on pension and postretirement benefit plans	0		(15)		0		(14)
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses	0		4		0		5

Total other comprehensive income (loss) before income taxes	(7)		4		10		(35)
Income tax (provision) benefit related to pension and postretirement benefit plans	0		4		0		4
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans	0		(1)		0		(1)
Total other comprehensive income (loss)	(7)		7		10		(32)
Total comprehensive income (loss)	(176)		(845)		29		(1,241)
Comprehensive (income) loss attributable to noncontrolling interests	1		5		2		6
Comprehensive income (loss) attributable to Hertz Global	$	(175)	$	(840)	$	31	$	(1,235)

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 MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Unaudited

(In millions)


		Preferred Stock Shares	Common Stock Shares	Common Stock Amount				Additional Paid-In Capital		Accumulated Deficit(1)				Accumulated Other Comprehensive Income (Loss)				Treasury Stock Shares			Treasury Stock Amount			Stockholders' Equity Attributable to Hertz Global			Non- controlling Interests(1)			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		Stockholders' Equity Attributable to Hertz Global		Non- controlling Interests		Total Stockholders' Equity
Balance as of:	Balance as of:																		Balance as of:
December 31, 2018		0	84			$	1					$	2,261			$	(909)		$	(192)			2			$	(100)		$	1,061					$	59		$	1,120
December 31, 2019																																December 31, 2019		0			$	0		142		$	1	$	3,024	$	(967)	$	(189)	2		$	(100)	$	1,769	$	119	$	1,888
Net income (loss)	Net income (loss)	—	—	—				—		(147)				—				—			—			(147)			(1)			(148)			Net income (loss)		—			—			—		—		—		(356)		—		—		—		(356)		(1)		(357)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				7				—			—			7			—			7			Other comprehensive income (loss)		—			—			—		—		—		—		(39)		—		—		(39)		—		(39)
Net settlement on vesting of restricted stock	Net settlement on vesting of restricted stock	—	—	—				(2)		—				—				—			—			(2)			—			(2)			Net settlement on vesting of restricted stock		—			—			—		—		(2)		—		—		—		—		(2)		—		(2)
Stock-based compensation charges		—	—	—				3		—				—				—			—			3			—			3

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—	—				—		—				—				—			—			—			25			25			Contributions from noncontrolling interests		—			—			—		—		—		—		—		—		—		—		1		1
March 31, 2019		0	84	1				2,262		(1,056)				(185)				2			(100)			922			83			1,005
March 31, 2020																																March 31, 2020		0			0			142		1		3,022		(1,323)		(228)		2		(100)		1,372		119		1,491
Net income (loss)	Net income (loss)	—	—	—				—		39				—				—			—			39			2			41			Net income (loss)		—			—			—		—		—		(847)		—		—		—		(847)		(5)		(852)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				(2)				—			—			(2)			—			(2)			Other comprehensive income (loss)		—			—			—		—		—		—		7		—		—		7		—		7
Stock-based compensation charges	Stock-based compensation charges	—	—	—				5		—				—				—			—			5			—			5			Stock-based compensation charges		—			—			—		—		(2)		—		—		—		—		(2)		—		(2)
Contributions from noncontrolling interests		—	—	—				—		—				—				—			—			—			21			21
June 30, 2019		0	84	1				2,267		(1,017)				(187)				2			(100)			964			106			1,070
Net income (loss)		—	—	—				—		169				—				—			—			169			4			173
Other comprehensive income (loss)		—	—	—				—		—				(11)				—			—			(11)			—			(11)
Net settlement on vesting of restricted stock		—	—	—				(2)		—				—				—			—			(2)			—			(2)
Stock-based compensation charges		—	—	—				6		—				—				—			—			6			—			6
Contributions from noncontrolling interests		—	—	—				—		—				—				—			—			—			5			5
Rights Offering, net		—	58	—				748		—				—				—			—			748			—			748
September 30, 2019		0	142	$	1			$	3,019	$	(848)			$	(198)			2			$	(100)		$	1,874		$	115		$	1,989
Stock issuance, net																																Stock issuance, net		—			—			14		1		28		—		—		—		—		29		—		29
June 30, 2020																																June 30, 2020		0			$	0		156		$	2	$	3,048	$	(2,170)	$	(221)	2		$	(100)	$	559	$	114	$	673

(1) Net income (loss) and Net income (loss) attributable to noncontrolling interests are computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to amounts in the accompanying unaudited condensed consolidated balance sheet.

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Unaudited

(In millions)


																																				Mezzanine Equity
		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		Retained Earnings (Accumulated Deficit)(1)		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:	Balance as of:																		Balance as of:				Common Stock Shares							Additional Paid-In Capital
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
December 31, 2020																																	December 31, 2020		0				$	0					156		$	2	$	3,047	$	(2,681)	$	(212)	2		$	(100)	$	56	$	37	$	93
Net income (loss)	Net income (loss)	—	—	—				—		(847)				—				—			—			(847)			(5)				(852)			Net income (loss)		—				—						—		—		—		190		—		—		—		190		(1)		189
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				7				—			—			7			—				7			Other comprehensive income (loss)		—				—						—		—		—		—		17		—		—		17		—		17

Stock-based compensation charges	Stock-based compensation charges	—	—	—				(2)		—				—				—			—			(2)			—				(2)			Stock-based compensation charges		—				—						—		—		2		—		—		—		—		2		—		2
Stock issuance, net		—	14	1				28		—				—				—			—			29			—				29

June 30, 2020		0	156	2				3,048		(2,170)				(221)				2			(100)			559			114				673
Distributions to noncontrolling interests																																	Distributions to noncontrolling interests		—				—						—		—		—		—		—		—		—		—		(11)		(11)
March 31, 2021																																	March 31, 2021		0				0						156		2		3,049		(2,491)		(195)		2		(100)		265		25		290
Net income (loss)	Net income (loss)	—	—	—				—		(222)				—				—			—			(222)			(1)				(223)			Net income (loss)		—				—						—		—		—		(168)		—		—		—		(168)		(1)		(169)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				5				—			—			5			—				5			Other comprehensive income (loss)		—				—						—		—		—		—		(7)		—		—		(7)		—		(7)
Net settlement on vesting of restricted stock		—	—	—				(1)		—				—				—			—			(1)			—				(1)

Cancellation of common and treasury shares in exchange for new common shares																																	Cancellation of common and treasury shares in exchange for new common shares		—				—						(142)		(2)		(98)		—		—		(2)		100		0		—		0
Cancellation of stock-based awards																																	Cancellation of stock-based awards		—				—						—		—		(10)		—		—		—		—		(10)		—		(10)
Distributions to common stockholders																																	Distributions to common stockholders		—				—						—		—		(239)		—		—		—		—		(239)		—		(239)
Contribution from Plan Sponsors																																	Contribution from Plan Sponsors		—				—						277		3		2,778		—		—		—		—		2,781		—		2,781
Rights Offering, net																																	Rights Offering, net		—				—						180		2		1,796		—		—		—		—		1,798		—		1,798
Public Warrants issuance																																	Public Warrants issuance		—				—						—		—		(800)		—		—		—		—		(800)		—		(800)
Preferred stock issuance, net																																	Preferred stock issuance, net		2				1,433						—		—		—		—		—		—		—		—		—		—
Distributions to non-controlling interests, net																																	Distributions to non-controlling interests, net		—				—						—		—		—		—		—		—		—		—		(5)		(5)

June 30, 2021																																	June 30, 2021		2				$	1,433					471		$	5	$	6,476	$	(2,659)	$	(202)	0		$	0	$	3,620	$	19	$	3,639

Distributions to noncontrolling interests		—	—	—				—		—				—				—			—			—			(54)				(54)
September 30, 2020		0	156	$	2			$	3,047	$	(2,392)			$	(216)			2			$	(100)		$	341		$	59			$	400

1) Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet.

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)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	(1,432)	$	65	Net income (loss)	$	19	$	(1,209)
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	Depreciation and reserves for revenue earning vehicles	1,809		2,056		Depreciation and reserves for revenue earning vehicles	420		1,393
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	168		151		Depreciation and amortization, non-vehicle	104		110
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	37		40		Amortization of deferred financing costs and debt discount (premium)	98		26
Loss on extinguishment of debt						Loss on extinguishment of debt	8		3

Stock-based compensation charges		(2)		14
Provision for receivables allowance	Provision for receivables allowance	66		35		Provision for receivables allowance	64		32
Deferred income taxes, net	Deferred income taxes, net	(243)		58		Deferred income taxes, net	(16)		(205)
Technology-related intangible and other asset impairments	Technology-related intangible and other asset impairments	193		0		Technology-related intangible and other asset impairments	0		193
(Gain) loss on marketable securities		0		(26)

Reorganization items, net						Reorganization items, net	314		(1)
(Gain) loss from the sale of a business						(Gain) loss from the sale of a business	(400)		0
(Gain) loss on sale of non-vehicle capital assets	(Gain) loss on sale of non-vehicle capital assets	(24)		(15)		(Gain) loss on sale of non-vehicle capital assets	(6)		(24)
(Gain) loss on derivatives		(3)		(10)

Other	Other	7		6		Other	0		(1)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	231		(132)		Non-vehicle receivables	(214)		287
Prepaid expenses and other assets	Prepaid expenses and other assets	33		(44)		Prepaid expenses and other assets	(67)		(4)
Operating lease right-of-use assets	Operating lease right-of-use assets	277		305		Operating lease right-of-use assets	154		189
Non-vehicle accounts payable	Non-vehicle accounts payable	224		72		Non-vehicle accounts payable	94		168
Accrued liabilities	Accrued liabilities	(47)		(48)		Accrued liabilities	(11)		(61)
Accrued taxes, net	Accrued taxes, net	(4)		25		Accrued taxes, net	91		(20)
Operating lease liabilities	Operating lease liabilities	(287)		(323)		Operating lease liabilities	(160)		(195)
Self-insured liabilities	Self-insured liabilities	(75)		4		Self-insured liabilities	(27)		(55)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	928		2,233		Net cash provided by (used in) operating activities	465		626
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(5,188)		(11,536)		Revenue earning vehicles expenditures	(4,136)		(4,956)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	8,770		6,193		Proceeds from disposal of revenue earning vehicles	1,199		5,005
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(89)		(170)		Non-vehicle capital asset expenditures	(17)		(72)
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	56		21		Proceeds from non-vehicle capital assets disposed of or to be disposed of	10		50
Sales of marketable securities	Sales of marketable securities	74		0		Sales of marketable securities	0		74
Collateral payments						Collateral payments	(303)		0
Collateral returned in exchange for letters of credit						Collateral returned in exchange for letters of credit	114		0
Proceeds from the sale of a business, net of cash sold						Proceeds from the sale of a business, net of cash sold	818		0
Other	Other	(1)		0		Other	(1)		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	3,622		(5,492)		Net cash provided by (used in) investing activities	(2,316)		100
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	4,226		11,039		Proceeds from issuance of vehicle debt	8,939		4,174
Repayments of vehicle debt	Repayments of vehicle debt	(8,931)		(8,538)		Repayments of vehicle debt	(8,120)		(4,613)
Proceeds from issuance of non-vehicle debt		1,553		1,726
Repayments of non-vehicle debt		(854)		(2,437)
Payment of financing costs		(11)		(33)

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)


		Nine Months Ended September 30,
		2020		2019			Six Months Ended June 30,
							2021		2020
Proceeds from issuance of non-vehicle debt						Proceeds from issuance of non-vehicle debt	3,139		1,498
Repayments of non-vehicle debt						Repayments of non-vehicle debt	(6,341)		(853)
Payment of financing costs						Payment of financing costs	(151)		(11)
Proceeds from Plan Sponsors						Proceeds from Plan Sponsors	2,781		0
Proceeds from Rights Offering, net						Proceeds from Rights Offering, net	1,635		0
Proceeds from the issuance of preferred stock, net						Proceeds from the issuance of preferred stock, net	1,433		0
Distributions to common stockholders						Distributions to common stockholders	(239)		0
Proceeds from the issuance of stock, net	Proceeds from the issuance of stock, net	28		0		Proceeds from the issuance of stock, net	0		29
Early redemption payments						Early redemption payments	(85)		0
Contributions from (distributions to) noncontrolling interests	Contributions from (distributions to) noncontrolling interests	(55)		49		Contributions from (distributions to) noncontrolling interests	(15)		0
Proceeds from Rights Offering, net		0		748
Other	Other	(2)		(3)		Other	0		(2)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(4,046)		2,551		Net cash provided by (used in) financing activities	2,976		222
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	18		(7)		Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(8)		3
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	522		(715)		Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	1,117		951
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period		1,360		1,410
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)						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	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	1,882	$	695	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	2,695	$	2,311

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest, net of amounts capitalized:	Interest, net of amounts capitalized:					Interest, net of amounts capitalized:
Vehicle	Vehicle	$	275	$	331	Vehicle	$	203	$	193
Non-vehicle	Non-vehicle	78		182		Non-vehicle	158		67
Income taxes, net of refunds	Income taxes, net of refunds	(13)		12		Income taxes, net of refunds	2		3

Supplemental disclosures of non-cash information:	Supplemental disclosures of non-cash information:					Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	30	$	43	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	39	$	43
Sales of revenue earning vehicles included in vehicle receivables	Sales of revenue earning vehicles included in vehicle receivables	575		712		Sales of revenue earning vehicles included in vehicle receivables	33		759
Fleet payables included in liabilities subject to compromise		11		0

Purchases of non-vehicle capital assets included in accounts payable	Purchases of non-vehicle capital assets included in accounts payable	7		48		Purchases of non-vehicle capital assets included in accounts payable	24		4
Purchases of non-vehicle capital assets included in liabilities subject to compromise	Purchases of non-vehicle capital assets included in liabilities subject to compromise	20		0		Purchases of non-vehicle capital assets included in liabilities subject to compromise	0		31
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease						Revenue earning vehicles and non-vehicle capital assets acquired through capital lease	56		10
Public Warrants issuance						Public Warrants issuance	800		0
Backstop equity issuance						Backstop equity issuance	164		0

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale at December 31, 2020, 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)


		September 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,137	$	865	Cash and cash equivalents	$	1,820	$	1,096
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	382		466		Vehicle	247		50
Non-vehicle	Non-vehicle	335		29		Non-vehicle	628		333
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	717		495		Total restricted cash and cash equivalents	875		383
Total cash, cash equivalents, restricted cash and restricted cash equivalents	Total cash, cash equivalents, restricted cash and restricted cash equivalents	1,854		1,360		Total cash, cash equivalents, restricted cash and restricted cash equivalents	2,695		1,479
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	629		791		Vehicle	87		164
Non-vehicle, net of allowance of $63 and $35, respectively		787		1,049
Non-vehicle, net of allowance of $58 and $46, respectively						Non-vehicle, net of allowance of $58 and $46, respectively	937		613
Total receivables, net	Total receivables, net	1,416		1,840		Total receivables, net	1,024		777
Due from Hertz Holdings	Due from Hertz Holdings	1		0		Due from Hertz Holdings	0		1
Prepaid expenses and other assets	Prepaid expenses and other assets	428		689		Prepaid expenses and other assets	1,184		372
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	11,462		17,085		Vehicles	9,563		7,540
Less: accumulated depreciation	Less: accumulated depreciation	(3,011)		(3,296)		Less: accumulated depreciation	(1,573)		(1,478)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	8,451		13,789		Total revenue earning vehicles, net	7,990		6,062
Property and equipment, net	Property and equipment, net	699		757		Property and equipment, net	618		666
Operating lease right-of-use assets	Operating lease right-of-use assets	1,737		1,871		Operating lease right-of-use assets	1,504		1,675
Intangible assets, net	Intangible assets, net	3,062		3,238		Intangible assets, net	2,947		2,992
Goodwill	Goodwill	1,081		1,083		Goodwill	1,045		1,045
Assets held for sale						Assets held for sale	0		1,811
Total assets(a)	Total assets(a)	$	18,729	$	24,627	Total assets(a)	$	19,007	$	16,880
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)						LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	84	$	289	Vehicle	$	93	$	29
Non-vehicle	Non-vehicle	501		654		Non-vehicle	687		389
Total accounts payable	Total accounts payable	585		943		Total accounts payable	780		418
Accrued liabilities	Accrued liabilities	812		1,032		Accrued liabilities	945		759
Accrued taxes, net	Accrued taxes, net	119		150		Accrued taxes, net	232		121
Debt:	Debt:					Debt:
Vehicle	Vehicle	8,753		13,368		Vehicle	7,035		6,024
Non-vehicle	Non-vehicle	18		3,721		Non-vehicle	1,514		243
Total debt	Total debt	8,771		17,089		Total debt	8,549		6,267
Operating lease liabilities	Operating lease liabilities	1,703		1,848		Operating lease liabilities	1,459		1,636
Self-insured liabilities	Self-insured liabilities	481		553		Self-insured liabilities	459		488
Deferred income taxes, net	Deferred income taxes, net	862		1,128		Deferred income taxes, net	715		735
Total liabilities not subject to compromise	Total liabilities not subject to compromise	13,333		22,743		Total liabilities not subject to compromise	13,139		10,424
Liabilities subject to compromise	Liabilities subject to compromise	5,066		0		Liabilities subject to compromise	0		5,030
Liabilities held for sale						Liabilities held for sale	0		1,431
Total liabilities(a)	Total liabilities(a)	18,399		22,743		Total liabilities(a)	13,139		16,885
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
Stockholder's equity:
Stockholder's equity (deficit):						Stockholder's equity (deficit):
Common stock, $0.01 par value, 100 and 100 shares issued and outstanding, respectively	Common stock, $0.01 par value, 100 and 100 shares issued and outstanding, respectively	0		0		Common stock, $0.01 par value, 100 and 100 shares issued and outstanding, respectively	0		0
Additional paid-in capital	Additional paid-in capital	3,953		3,955		Additional paid-in capital	9,583		3,953
Due from affiliate		0		(64)
Accumulated deficit		(3,466)		(1,937)
Due to Hertz Holdings						Due to Hertz Holdings	65		0
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	(3,597)		(3,783)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(216)		(189)		Accumulated other comprehensive income (loss)	(202)		(212)
Stockholder's equity attributable to Hertz		271		1,765
Stockholder's equity (deficit) attributable to Hertz						Stockholder's equity (deficit) attributable to Hertz	5,849		(42)
Noncontrolling interests	Noncontrolling interests	59		119		Noncontrolling interests	19		37
Total stockholder's equity		330		1,884
Total liabilities and stockholder's equity		$	18,729	$	24,627
Total stockholder's equity (deficit)						Total stockholder's equity (deficit)	5,868		(5)
Total liabilities and stockholder's equity (deficit)						Total liabilities and stockholder's equity (deficit)	$	19,007	$	16,880

(a)The Hertz Corporation's consolidated total assets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 include total assets of ~~variable interest entities (“VIEs”)~~VIEs of ~~$705~~$808 million and ~~$1.3 billion,~~$511 million, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 include total liabilities of VIEs of ~~$647~~$694 million and ~~$1.1 billion,~~$475 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, "Debt," and "767 Auto Leasing LLC" in Note ~~14,~~15, "Related Party Transactions," for further information.

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 OPERATIONS

Unaudited

(In millions)

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Revenues:
Worldwide vehicle rental $ 1,119 $ 2,664 $ 3,535 $ 6,961
All other operations 149 172 488 493
Total revenues 1,268 2,836 4,023 7,454
Expenses:
Direct vehicle and operating 832 1,492 2,777 4,147
Depreciation of revenue earning vehicles and lease charges 347 667 1,634 1,892
Selling, general and administrative 143 232 519 723
Interest expense, net:
Vehicle 110 134 360 372
Non-vehicle (excludes contractual interest of $53 million and $75 million for the three and nine months ended September 30, 2020, respectively) 17 68 116 209
Total interest expense, net 127 202 476 581
Technology-related intangible and other asset impairments 0 0 193 0
Write-off of intercompany loan 0 0 133 0
Other (income) expense, net 0 (6) (15) (37)
Reorganization items, net 78 0 101 0
Total expenses 1,527 2,587 5,818 7,306
Income (loss) before income taxes (259) 249 (1,795) 148
Income tax (provision) benefit 36 (75) 259 (79)
Net income (loss) (223) 174 (1,536) 69
Net (income) loss attributable to noncontrolling interests 1 (4) 7 (4)
Net income (loss) attributable to Hertz $ (222) $ 170 $ (1,529) $ 65



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020



Revenues	$	1,873	$	832	$	3,161	$	2,755
Expenses:
Direct vehicle and operating	946		652		1,724		1,845
Depreciation of revenue earning vehicles and lease charges	116		609		359		1,285
Non-vehicle depreciation and amortization	50		57		104		110
Selling, general and administrative	172		164		321		368
Interest expense, net:
Vehicle	98		132		202		250
Non-vehicle (excludes contractual interest of $22 million for the three and six months ended June 30, 2020)	91		43		135		99
Total interest expense, net	189		175		337		349
Technology-related intangible and other asset impairments	0		193		0		193
Write-off of intercompany loan	0		133		0		133
Other (income) expense, net	(10)		2		(13)		(15)
Reorganization items, net	469		23		513		23
(Gain) from the sale of a business	(8)		0		(400)		0
Total expenses	1,924		2,008		2,945		4,291
Income (loss) before income taxes	(51)		(1,176)		216		(1,536)
Income tax (provision) benefit	46		219		(33)		224
Net income (loss)	(5)		(957)		183		(1,312)
Net (income) loss attributable to noncontrolling interests	1		5		2		6
Net income (loss) attributable to Hertz	$	(4)	$	(952)	$	185	$	(1,306)

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
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Net income (loss) $ (223) $ 174 $ (1,536) $ 69
Other comprehensive income (loss):
Foreign currency translation adjustments (6) (13) (32) (11)
Net gain (loss) on defined benefit pension plans 15 1 1 1
Reclassification to other (income) expense for amortization of actuarial (gains) losses on defined benefit pension plans 1 2 6 5
Total other comprehensive income (loss) before income taxes 10 (10) (25) (5)
Income tax (provision) benefit related to net gains and losses on defined benefit pension plans (4) 0 0 0
Income tax (provision) benefit related to reclassified amounts of net periodic costs on defined benefit pension plans (1) (1) (2) (1)
Total other comprehensive income (loss) 5 (11) (27) (6)
Total comprehensive income (loss) (218) 163 (1,563) 63
Comprehensive (income) loss attributable to noncontrolling interests 1 (4) 7 (4)
Comprehensive income (loss) attributable to Hertz $ (217) $ 159 $ (1,556) $ 59



	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	(5)	$	(957)	$	183	$	(1,312)
Other comprehensive income (loss):
Foreign currency translation adjustments	(7)		15		10		(26)
Net gain (loss) on pension and postretirement benefit plans	0		(15)		0		(14)
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses	0		4		0		5

Total other comprehensive income (loss) before income taxes	(7)		4		10		(35)
Income tax (provision) benefit related to pension and postretirement benefit plans	0		4		0		4
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans	0		(1)		0		(1)
Total other comprehensive income (loss)	(7)		7		10		(32)
Total comprehensive income (loss)	(12)		(950)		193		(1,344)
Comprehensive (income) loss attributable to noncontrolling interests	1		5		2		6
Comprehensive income (loss) attributable to Hertz	$	(11)	$	(945)	$	195	$	(1,338)

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(1)
Accumulated
Other
Comprehensive
Income (Loss) Stockholder's Equity Attributable to Hertz
Noncontrolling Interests(1)
Total Stockholder's Equity
Balance as of:
December 31, 2018 100 $ 0 $ 3,187 $ (52) $ (1,884) $ (192) $ 1,059 $ 59 $ 1,118
Net income (loss) — — — — (145) — (145) (1) (146)
Due from Hertz Holdings — — — (4) — — (4) — (4)
Other comprehensive income (loss) — — — — — 7 7 — 7
Stock-based compensation charges — — 3 — — — 3 — 3
Contributions from noncontrolling interests — — — — — — — 25 25
March 31, 2019 100 0 3,190 (56) (2,029) (185) 920 83 1,003
Net income (loss) — — — — 39 — 39 2 41
Due from Hertz Holdings — — — (2) — — (2) — (2)
Other comprehensive income (loss) — — — — — (2) (2) — (2)
Stock-based compensation charges — — 5 — — — 5 — 5
Contributions from noncontrolling interests — — — — — — — 21 21
June 30, 2019 100 0 3,195 (58) (1,990) (187) 960 106 1,066
Net income (loss) — — — — 171 — 171 4 175
Due from Hertz Holdings — — — (4) — — (4) — (4)
Other comprehensive income (loss) — — — — — (11) (11) — (11)
Stock-based compensation charges — — 6 — — — 6 — 6
Contributions from noncontrolling interests — — — — — — — 5 5
Contributions from Hertz Holdings — — 750 — — — 750 — 750
September 30, 2019 100 $ 0 $ 3,951 $ (62) $ (1,819) $ (198) $ 1,872 $ 115 $ 1,987


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Due From Affiliate		Accumulated Deficit(1)		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
Net income (loss)	—	—		—		—		(951)		—		(951)		(5)		(956)
Due from Hertz Holdings	—	—		—		(1)		—		—		(1)		—		(1)
Liabilities subject to compromise(2)	—	—		—		(65)		—		—		(65)		—		(65)
Write-off of intercompany loan(3)	—	—		—		133		—		—		133		—		133
Other comprehensive income (loss)	—	—		—		—		—		7		7		—		7
Stock-based compensation charges	—	—		(2)		—		—		—		(2)		—		(2)

June 30, 2020	100	$	0	$	3,953	$	0	$	(3,243)	$	(221)	$	489	$	114	$	603


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Due To Affiliate		Accumulated Deficit(1)		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	$	0	$	(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		0		(3,593)		(195)		167		25		192
Net income (loss)	—	—		—		—		(4)		—		(4)		(1)		(5)
Due to Hertz Holdings	—	—		—		65		—		—		65		—		65


Other comprehensive income (loss)	—	—		—		—		—		(7)		(7)		—		(7)

Cancellation of stock-based awards	—	—		(10)		—		—		—		(10)		—		(10)
Contributions from Hertz Holdings	—	—		5,638		—		—		—		5,638		—		5,638
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(5)		(5)

June 30, 2021	100	$	0	$	9,583	$	65	$	(3,597)	$	(202)	$	5,849	$	19	$	5,868

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTOR-IN-POSSESSION)~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY~~

~~Unaudited~~

~~(In millions, except share data)~~

Common Stock Shares Common Stock Amount Additional
Paid-In Capital Due From Affiliate
Accumulated
Deficit(1)
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
Net income (loss) — — — — (951) — (951) (5) (956)
Due from Hertz Holdings — — — (1) — — (1) — (1)
Liabilities subject to compromise(2)
— — — (65) — — (65) — (65)
Write-off of intercompany loan(3)
— — — 133 — — 133 — 133
Other comprehensive income (loss) — — — — — 7 7 — 7
Stock-based compensation charges — — (2) — — — (2) — (2)
June 30, 2020 100 0 3,953 0 (3,243) (221) 489 114 603
Net income (loss) — — — — (223) — (223) (1) (224)
Other comprehensive income (loss) — — — — — 5 5 — 5
Distributions to noncontrolling interests — — — — — — — (54) (54)
September 30, 2020 100 $ 0 $ 3,953 $ 0 $ (3,466) $ (216) $ 271 $ 59 $ 330

~~(1)~~1) Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet.

~~(2)~~2) As a result of filing the Chapter 11 Cases, a ~~Pre-petition~~pre-petition loan due to an affiliate was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of ~~September 30,~~December 31, 2020. See Note ~~16,~~17, "Liabilities Subject to ~~Compromise."~~Compromise ."

~~(3)~~3) As a result of filing the Chapter 11 Cases, the full amount outstanding under a loan due from affiliate was deemed uncollectible and written off. See Note ~~14,~~15, "Related Party Transactions."

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)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	(1,536)	$	69	Net income (loss)	$	183	$	(1,312)
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	Depreciation and reserves for revenue earning vehicles	1,809		2,056		Depreciation and reserves for revenue earning vehicles	420		1,393
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	168		151		Depreciation and amortization, non-vehicle	104		110
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	37		40		Amortization of deferred financing costs and debt discount (premium)	98		26
Loss on extinguishment of debt						Loss on extinguishment of debt	8		3

Stock-based compensation charges		(2)		14
Provision for receivables allowance	Provision for receivables allowance	66		35		Provision for receivables allowance	64		32
Deferred income taxes, net	Deferred income taxes, net	(271)		59		Deferred income taxes, net	(16)		(232)
Technology-related intangible and other asset impairments	Technology-related intangible and other asset impairments	193		0		Technology-related intangible and other asset impairments	0		193
Write-off of intercompany loan	Write-off of intercompany loan	133		0		Write-off of intercompany loan	0		133
(Gain) loss on marketable securities		0		(26)
Reorganization items, net						Reorganization items, net	150		(1)
(Gain) loss from the sale of a business						(Gain) loss from the sale of a business	(400)		0
(Gain) loss on sale of non-vehicle capital assets	(Gain) loss on sale of non-vehicle capital assets	(24)		(15)		(Gain) loss on sale of non-vehicle capital assets	(6)		(24)
(Gain) loss on derivatives		(3)		(10)

Other	Other	9		6		Other	0		(1)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	231		(132)		Non-vehicle receivables	(214)		287
Prepaid expenses and other assets	Prepaid expenses and other assets	33		(44)		Prepaid expenses and other assets	(67)		(4)
Operating lease right-of-use assets	Operating lease right-of-use assets	277		305		Operating lease right-of-use assets	154		189
Non-vehicle accounts payable	Non-vehicle accounts payable	224		72		Non-vehicle accounts payable	94		168
Accrued liabilities	Accrued liabilities	(47)		(48)		Accrued liabilities	(11)		(61)
Accrued taxes, net	Accrued taxes, net	(4)		25		Accrued taxes, net	91		(20)
Operating lease liabilities	Operating lease liabilities	(287)		(323)		Operating lease liabilities	(160)		(195)
Self-insured liabilities	Self-insured liabilities	(75)		4		Self-insured liabilities	(27)		(55)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	931		2,238		Net cash provided by (used in) operating activities	465		629
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(5,188)		(11,536)		Revenue earning vehicles expenditures	(4,136)		(4,956)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	8,770		6,193		Proceeds from disposal of revenue earning vehicles	1,199		5,005
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(89)		(170)		Non-vehicle capital asset expenditures	(17)		(72)
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	56		21		Proceeds from non-vehicle capital assets disposed of or to be disposed of	10		50
Sales of marketable securities	Sales of marketable securities	74		0		Sales of marketable securities	0		74
Collateral payments						Collateral payments	(303)		0
Collateral returned in exchange for letters of credit						Collateral returned in exchange for letters of credit	114		0
Proceeds from the sale of a business, net of cash sold						Proceeds from the sale of a business, net of cash sold	818		0
Other	Other	(1)		0		Other	(1)		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	3,622		(5,492)		Net cash provided by (used in) investing activities	(2,316)		100
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	4,226		11,039		Proceeds from issuance of vehicle debt	8,939		4,174
Repayments of vehicle debt		(8,931)		(8,538)
Proceeds from issuance of non-vehicle debt		1,553		1,726
Repayments of non-vehicle debt		(854)		(2,437)

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)


		Nine Months Ended September 30,
		2020		2019			Six Months Ended June 30,
							2021		2020
Repayments of vehicle debt						Repayments of vehicle debt	(8,120)		(4,613)
Proceeds from issuance of non-vehicle debt						Proceeds from issuance of non-vehicle debt	3,139		1,498
Repayments of non-vehicle debt						Repayments of non-vehicle debt	(6,341)		(853)
Payment of financing costs	Payment of financing costs	(11)		(33)		Payment of financing costs	(151)		(11)
Contributions from Hertz Holdings						Contributions from Hertz Holdings	5,638		0
Advances to Hertz Holdings	Advances to Hertz Holdings	(5)		(10)		Advances to Hertz Holdings	0		(4)
Early redemption payments						Early redemption payments	(85)		0
Contributions from (distributions to) noncontrolling interests	Contributions from (distributions to) noncontrolling interests	(55)		49		Contributions from (distributions to) noncontrolling interests	(15)		0
Contributions from Hertz Holdings		0		750

Other						Other	0		(1)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(4,077)		2,546		Net cash provided by (used in) financing activities	3,004		190
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	18		(7)		Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents	(8)		3
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	494		(715)		Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period	1,145		922
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period		1,360		1,410
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)						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	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	1,854	$	695	Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	2,695	$	2,282

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest, net of amounts capitalized:	Interest, net of amounts capitalized:					Interest, net of amounts capitalized:
Vehicle	Vehicle	$	275	$	331	Vehicle	$	203	$	193
Non-vehicle	Non-vehicle	78		182		Non-vehicle	158		67
Income taxes, net of refunds	Income taxes, net of refunds	(13)		12		Income taxes, net of refunds	2		3

Supplemental disclosures of non-cash information:	Supplemental disclosures of non-cash information:					Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	30	$	43	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	39	$	43
Sales of revenue earning vehicles included in vehicle receivables	Sales of revenue earning vehicles included in vehicle receivables	575		712		Sales of revenue earning vehicles included in vehicle receivables	33		759
Fleet payables included in liabilities subject to compromise		11		0

Purchases of non-vehicle capital assets included in accounts payable	Purchases of non-vehicle capital assets included in accounts payable	7		48		Purchases of non-vehicle capital assets included in accounts payable	24		4
Purchases of non-vehicle capital assets included in liabilities subject to compromise	Purchases of non-vehicle capital assets included in liabilities subject to compromise	20		0		Purchases of non-vehicle capital assets included in liabilities subject to compromise	0		31
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease						Revenue earning vehicles and non-vehicle capital assets acquired through capital lease	56		10

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale at December 31, 2020, as disclosed in Note 3, "Divestitures."

The accompanying notes are an integral part of these 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

Unaudited

Note 1—Background

Hertz Global Holdings, Inc. ~~(Hertz Global~~("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. 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. ~~Through~~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 ~~Hertz provides~~(the "Donlen Sale"), a business which provided vehicle leasing and fleet management services.

Chapter 11 and Emergence

In March 2020, the World Health Organization declared COVID-19 a ~~pandemic resulting from the COVID-19 viral disease ("COVID-19").~~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. ~~Despite a strong start to the year, as~~As a result of the impact of COVID-19 and the associated government responses on travel demand, late in the first quarter of 2020, the Company ~~began experiencing~~experienced a high level of rental cancellations and a significant decline in forward bookings. In response, the Company began ~~adjusting its fleet levels to reflect the reduced level of demand by leveraging its multiple used-vehicle channels and negotiating with suppliers to reduce fleet commitments.~~

Additionally, the Company began aggressively managing costs, including implementing employee furlough programs affecting approximately 20,000 employees worldwide to align staffing levels with the slowdown in demand. The Company (i) initiated a restructuring program affecting approximately 11,000 employees in its U.S. RAC segment and U.S. corporate operations, the majority of which were previously furloughed; (ii) actively negotiated to abate or defer its airport rent and concession payments; (iii) substantially reduced capital expenditures; (iv) eliminated discretionary marketing spend; and (v) reduced commitments to purchase vehicles by approximately $4.0 billion from original commitments in its U.S. RAC segment, the majority of which were delivered during the second quarter of 2020. See Note 8, "Restructuring" for further information regarding the restructuring program disclosed above.

~~Although the Company had taken~~ aggressive ~~action~~actions to eliminate ~~costs,~~costs. However, it faced significant ongoing expenses, including monthly payments under its Amended and Restated Master Motor Vehicle Operating Lease and Servicing Agreement (Series 2013-G1) (the "Operating Lease") with Hertz Vehicle Financing LLC ("HVF"), pursuant to which Hertz leases from HVF vehicles used in the Company's U.S. rental car operations. Hertz Vehicle Financing II LP ("HVF II"), a special purpose financing subsidiary, issues asset-backed notes and lends the proceeds thereof to HVF to finance the acquisition of vehicles, which are then leased to Hertz pursuant to the Operating Lease. Monthly payments under the Operating Lease are variable and significant and are subject to volatility depending upon the changes in current market value estimates of the underlying leased vehicles. During April 2020, the Company engaged in discussions with various creditors to obtain relief from its obligations to make full rent payments under its Operating Lease. While such discussions were ongoing, to preserve liquidity, on April 27, 2020, Hertz did not make certain payments, including the full rent payments, in accordance with the Operating Lease.

As a result of the failure to make the full rent payments on April 27, 2020, an amortization event was in effect as of May 5, 2020 for all series of notes issued by HVF II and a liquidation event was in effectlarge lease payment with respect to the variable funding notes (“Series 2013-A Notes”) issued by HVF II. As a result of the amortization event, and notwithstanding the forbearance agreement described below, proceeds from the sales of vehiclesits vehicle fleet that collateralize the notes issued by HVF II were to be primarily applied to the payment of principal and interest under those notes and were not available to finance new vehicle acquisitions for Hertz. A liquidation event means that, unless the affected noteholders otherwise agree, the affected noteholders can direct the liquidation of vehicles serving as collateral for their notes.

On May 4, 2020, prior to the occurrence of the liquidation event with respect to the Series 2013-A Notes, Hertz, HVF, HVF II and DTG Operations, Inc. entered into a forbearance agreement (the “Forbearance Agreement”) with

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holders (the “VFN Noteholders”) of the Series 2013-A Notes representing approximately 77% in aggregate principal amount of the Series 2013-A Notes. Pursuant to the Forbearance Agreement that became effective against all VFN Noteholders, the VFN Noteholders agreed to forbear from exercising their liquidation remedies. The Forbearance Agreement with the VFN Noteholders expired on May 22, 2020.

Concurrently with entering into the Forbearance Agreement, on May 4, 2020, Hertz entered into limited waiver agreements (collectively, the “Waiver Agreements”) with certain of the lenders (the “Lenders”) under its (i) Senior RCF/senior term loan facility, (ii) letter of credit facility, (iii) alternative letter of credit facility and (iv) U.S. Vehicle RCF (collectively, the “Facilities”). Pursuant to the Waiver Agreements, the Lenders agreed to (a) waive any default or event of default that could have resulted from the above referenced missed payment under the Operating Lease, (b) waive any default or event of default that had arisenincreased as a result of ~~Hertz’s failure to deliver its 2020 operating budget~~COVID-19's impact on ~~a timely basis in accordance with~~ the Facilities and (c) extend the grace period to cure a default with respect to Hertz’s obligation to reimburse drawings that occurred under certain letters of credit during the waiver period. The Waiver Agreements which were effective across the Facilities expired on May 22, 2020.

In accordance with the Forbearance Agreement and the Waiver Agreements, the Company made a payment of approximately $30 million reflecting certain variable payment elements of monthly rent under the Operating Lease, including an interest component on May 5, 2020.

~~Voluntary Petitions for Bankruptcy~~car market.

~~In connection with the expiration of the Forbearance Agreement and the Waiver Agreements described above and the continuing economic impact from COVID-19, on~~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~~were jointly administered for procedural purposes only under the caption In ~~re: the~~re The Hertz Corporation, et al., Case No. 20-11218 (MFW). ~~Additional information about~~On May 14, 2021, the Debtors filed the solicitation version of the First Modified Third Amended Joint Chapter 11 ~~Cases, including access~~Plan of Reorganization of the Debtors (as amended, supplemented or otherwise modified in accordance with its terms, the "Plan of Reorganization"), and the solicitation version of the Supplement to ~~documents filed with~~the Disclosure Statement which was approved by the Bankruptcy Court ~~is available online~~on May 14, 2021 (as supplemented, the "Disclosure Statement").

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021 (the “Effective Date”), the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11 (the "Chapter 11 Emergence").

On the Effective Date, as a result of the Plan of Reorganization, the reorganized Company received cash proceeds of $7.5 billion comprised of:

•$2.8 billion from the purchase of common stock in reorganized Hertz Global by one or more funds associated with Knighthead Capital Management, LLC and its affiliates ("Knighthead"), one or more funds associated with Certares Opportunities LLC and its affiliates ("Certares"), investment funds, separate accounts and other entities owned (in whole or in part), controlled or managed by Apollo Capital Management L.P. and its affiliates (collectively "Apollo" and with Knighthead and Certares (the "Plan Sponsors"), and certain other investment funds and entities;

•$1.6 billion from the purchase of common stock in reorganized Hertz Global pursuant to the rights offering (the "Rights Offering") by Hertz Global's former equity holders, holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility and certain equity commitment parties pursuant to their obligations under the Equity Purchase and Commitment Agreement (the "EPCA");

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•$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and

•$1.5 billion in proceeds from the Company's secured exit term loan facilities.

Such cash proceeds were used, in part, to provide payments to the Company's stakeholders pursuant to the terms of the Plan of Reorganization as follows:

•the holders of administrative, priority and secured claims received payment in cash in full;

•the holders of the approximately $1.0 billion of obligations owed with respect to the Company's debtor-in-possession financing (the "DIP Credit Agreement") received payment in cash in full;

•the holders of the Company's Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;

•the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;

•the holders of the Company's €725 million European Vehicle Notes received payment in cash in full;

•the holders of the €257 million term loan facility incurred by Hertz International Ltd. received payment in cash in full;

•the holders of claims with respect to the unsecured Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at ~~https://restructuring.primeclerk.com/hertz,~~the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a ~~website administered by Prime Clerk, LLC ("Prime Clerk"~~claim for the payment of additional interest and/or premiums; and

•the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate from the Petition Date to the date of payment (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of 3 percent of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either new 30-year public warrants (the " Public Warrants"), ~~a third-party bankruptcy claims~~for in the aggregate of up to 18% of reorganized Hertz Global common stock issued and ~~noticing agent. The information~~outstanding on ~~this web site is not incorporated by reference~~the Effective Date, subject to dilution and ~~does not constitute part of this Form 10-Q.~~certain conditions, or subscription rights to participate in the Rights Offering as disclosed below.

In ~~May 2020,~~accordance with the ~~Bankruptcy Court approved motions filed by~~Plan of Reorganization, Hertz Global commenced a Rights Offering, under which eligible holders of Hertz Global's common stock and certain eligible holders of the ~~Debtors that were designed primarily~~Company's Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to ~~mitigate~~$1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. Pursuant to the ~~impact of~~EPCA, certain parties agreed to purchase all unsubscribed shares in the Rights Offering (the "Backstop Parties"). The final expiration date for the Rights Offering occurred on June 15, 2021, with eligible holders subscribing to purchase 127,362,114 shares (approximately $1.3 billion), with the Backstop Parties to purchase the remaining 36,137,887 shares (approximately $361 million). Hertz Global closed the Rights Offering upon emergence from the Chapter 11 Cases on the Company’s operations, customers and employees. The Debtors are authorized to conduct their business activities in the ordinary course, and pursuant to orders entered by the Bankruptcy Court, the Debtors are authorized to, among other things and subjectJune 30, 2021. Pursuant to the terms ~~and conditions~~ of such orders (i) pay employees’ wages and related obligations; (ii) pay certain taxes; (iii) pay critical vendors and certain fees to airport authorities and provide adequate protection; (iv) continue to maintain certain customer programs; (v) maintain their insurance program; (vi) use certain cash collateral on an interim basis; and (vii) continue their cash management system.the EPCA, the Backstop Parties received a backstop fee equal in the amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share).

On ~~July 24, 2020,~~ the ~~Bankruptcy Court entered an order related~~Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock to the Operating Lease (the "Interim Lease Order") which, among other things, directed the Debtors to (i) make $650 million of base rent payments under the Operating Lease to the HVF trustee in the amount of 6 equal monthly payments of approximately $108 million commencing in July 2020 through December 2020; (ii) dispose of at least 182,521 lease vehicles between June 1, 2020Apollo and ~~December 31, 2020, inclusive, where the~~received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees.

On the ~~dispositions,~~Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global entered into a public warrant agreement (the "Public Warrant Agreement") and issued 89,049,029 Public Warrants, subject to certain ~~exclusions set forth in~~conditions. The Public Warrants are exercisable from the ~~Interim Lease Order, will be used to make payments under the Operating Lease; (iii) fund interest payments on the Operating Lease from draws on certain existing letters~~date of ~~credit,~~issuance until June 30, 2051 at which are reimbursable by the Debtors; and (iv) suspend litigation relating to the Operating Lease until January 15, 2021 with all parties reserving all rights with respect to future litigation claims. For the period from June 1, 2020 through September 30, 2020, the Company disposed of approximately 165,000 vehicles which are associated with the Interim Lease Order.

time

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~~In September 2020,~~all unexercised Public Warrants will expire and the ~~Bankruptcy Court authorized~~rights of the ~~rejection~~holders of such expired Public Warrants will terminate. The Public Warrants have an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends and certain unexpired leases (the "Lease Rejection Orders") comprised of 257 off airport and 15 airport locations in the Company's U.S. RAC segment. In October 2020, the Bankruptcy Court authorized the rejection of certain unexpired leases (the "October Lease Rejections Orders") comprised of 29 airport and 24 off airport locations in the Company's U.S. RAC segment. See Note 7, "Leases" for further details.dilutive events.

~~Debtors-In-Possession~~See Note 10, "Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global," and Note 11, "Public Warrants – Hertz Global," for additional information on the new equity and Public Warrants issued upon the Company's Chapter 11 emergence.

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"). Absent an order from the Bankruptcy Court, substantially all of the Debtors’ Pre-petition liabilities are subject to settlement under 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 13,400 proofs of claim for an amount of approximately $104.9 billion. Such amount includes duplicate claims across multiple debtor legal entities. These claims will be 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 date of this Quarterly Report on Form 10-Q, the Company’s assessment of the validity of claims received has not been completed. In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable time to complete and likely will continue after the Debtors emerge from bankruptcy.

~~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~~asset-backed vehicle finance facilities was terminated, as disclosed in Note 6, "Debt." Consequently, the proceeds of sales of vehicles which ~~serve~~served as collateral for such vehicle finance facilities ~~must~~were to be applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries (as defined in Note 6, "Debt") and ~~are~~were not otherwise available to fund the Company’s operations. Additionally, the Company iswas precluded from accessing any of its subordinated investment in the vehicle collateral until the related defaults ~~are~~were waived or the ~~third party~~third-party funding under those facilities ~~has been~~were retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness. ~~Additionally, proceeds from vehicle receivables, excluding~~

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~~manufacturer rebates, as of September 30, 2020 and ongoing vehicle sales must be applied to vehicle debt in amortization.~~

The Company currently has waivers related to the filing of the Chapter 11 Cases under its European Vehicle Notes, European ABS and U.K. Fleet Financing facility that were extended to December 31, 2020, as disclosed in Note 6, "Debt."

The Company's inability to access its Senior RCF facility or retain any proceeds from the sale of vehicles under its U.S. ABS programs means that its source of liquidity is almost entirely its cash and cash equivalents on hand, cash generated from its operations and other new financing opportunities to the extent available. As of September 30, 2020, the Company had $1.1 billion of unrestricted cash and unrestricted cash equivalents which the Company believes will be sufficient to fund its operations through approximately December 31, 2020, assuming it does not experience any unforeseen liquidity needs before then, which could result in the utilization of the liquidity in advance of December 31, 2020. The Company believes, however, that if, among other things, (i) it cannot successfully extend the international vehicle debt waivers that expire on December 31, 2020, as disclosed in Note 6, "Debt," (ii) it cannot successfully implement a plan of reorganization, and (iii) there is not a significant recovery in the economic conditions in its major markets, its available cash and cash equivalents and cash generated by its operations will not be sufficient to fund operating requirements for the next twelve months. Consequently, the Debtors pursued vehicle financing for certain of their operations, either through waivers on existing facilities or entering into new arrangements to fund vehicles and vehicle leases, to supplement their sources of funding.

On ~~October 12, 2020,~~ the ~~Bankruptcy Court~~Effective Date, the reorganized Company entered into exit credit facilities in an order authorizing Hertz and Donlen Corporation to enter into certain agreements in connection with a new asset-based securitization facility with a newly formed non-Debtor special purpose entity, Donlen Fleet Lease Funding LLC ("DFLF"). On October 16, 2020, DFLF issued the Series 2020-1 Notesaggregate amount of $2.8 billion comprised of senior secured term loan facilities in an aggregate principal amount of $1.5 billion plus a senior secured revolving credit facility (the "First Lien RCF") in an aggregate committed amount of $1.3 billion. Additionally, the reorganized Company entered into a new ABS facility program ("HVF III") of a principal amount of $6.8 billion comprised of variable funding notes with a principal amount up to ~~$400 million pursuant to this new facility, as disclosed~~$2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion. On the Effective Date, substantially all non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization. See Note 6, ~~"Debt.~~"Debt," for additional information.

~~On October 29, 2020, the Bankruptcy Court entered an order authorizing the Debtors to obtain certain debtor-in-possession financing.~~In accordance with the Bankruptcy Court’s order, on October 30, 2020, Hertz, as borrower, and Hertz Global and certain of its subsidiaries located in the United States and Canada, in each case that are debtors in these Chapter 11 Cases, as guarantors, entered into a Senior Secured Superpriority Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for a superpriority secured debtor-in-possession credit facility comprised of delayed-draw term loans in an aggregate amount of up to $1.65 billion (the “DIP Loans”), of which (i) up to $1.0 billion can be used as equity for new interim fleet financing, giving the Debtors the ability to replenish their vehicle fleet in the future, and (ii) up to $800 million can be used for working capital and general corporate purposes. The DIP Loans are available in multiple draws of at least (i) $250 million each, or (ii) the remaining available commitments if such commitments are less than $250 million. The DIP Loans bear interest at a rate of LIBOR plus 7.25% (subject to a 1.00% floor), which is reduced to LIBOR plus 6.75% upon a significant repayment of Pre-petition first lien debt.~~See Note 6, "Debt" for further details.~~

On November 5, 2020, Hertz Global issued a press release announcing that it secured commitments for fleet financing totaling $4 billion and has filed a motion for approval of Hertz entering into the documentation for the financing by the Bankruptcy Court. Upon approval, and together with the up to $1 billion of the Company's debtor-in-possession financing that may be used for equity in the fleet financing subsidiary, the Company will have access to up to $5 billion in total funding to support its fleet financing needs.

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~~During the Chapter 11 Cases, the Company’s ability to continue as a going concern iswas contingent upon ~~its~~the Company’s ability to successfully implement ~~a plan~~the Company’s Plan of ~~reorganization,~~Reorganization, among other ~~factors, and~~factors. As a result of the ~~realization~~implementation of ~~assets and~~ the ~~satisfaction~~Plan of ~~liabilities are subject to uncertainty. Further, any plan of reorganization could materially change~~Reorganization, management believes there is no longer substantial doubt about the ~~amounts of assets and liabilities reported in the accompanying condensed consolidated financial statements. The~~

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~~accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable~~Company's ability 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.

~~NYSE Delisting and Transfer to the Over-the-Counter ("OTC") Market~~

On May 26, 2020, the Company received a letter from the staff of NYSE Regulation, Inc. that it had determined to commence proceedings to delist the common stock of Hertz Global from the NYSE in light of the Company’s disclosure on May 22, 2020 that it had commenced voluntary petitions for reorganization under Chapter 11. The Company appealed the determination in a timely manner and requested a hearing before the NYSE. On October 15, 2020, the NYSE heard the Company’s appeal. On October 29, 2020, the NYSE informed the Company, and publicly announced its determination following such appeal, that Hertz Global common stock is no longer suitable for listing on the NYSE and that the NYSE has suspended trading in Hertz Global's common stock (NYSE ticker symbol: HTZ) after the market close on October 29, 2020. On October 30, 2020, the NYSE applied to the Securities and Exchange Commission pursuant to Form 25 to remove the common stock of Hertz Global from listing and registration on the NYSE at the opening of business on November 10, 2020.

~~As a result of the suspension and expected delisting, Hertz Global's common stock began trading exclusively on the OTC market on October 30, 2020 under the symbol HTZGQ.~~concern.

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 ~~September~~June 30, ~~2020~~2021 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

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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 (“ASC”) 852, - Reorganizations ~~in preparing the accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020~~(“Topic 852”) 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~~pre-petition obligations of the Debtors that ~~may~~could be impacted by the Chapter 11 Cases have been classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of ~~September 30,~~December 31, 2020. These liabilities ~~are~~were reported at the amounts the Company ~~anticipates will~~anticipated would be allowed by the Bankruptcy Court, even if they ~~may~~could be settled for lesser amounts. See Note ~~16,~~17, "Liabilities Subject to Compromise," for additional information. In addition, certain charges related to the Chapter 11 Cases are recorded as reorganization items, net in the accompanying unaudited condensed consolidated statements of operations for the

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three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021 and 2020, respectively. See Note ~~17,~~18, "Reorganization Items, Net," for additional information.

Under Topic 852, companies must apply “fresh-start” accounting rules upon emergence from Chapter 11 reorganization if certain conditions are met. The Company did not qualify for "fresh-start" accounting under Topic 852 upon emergence from Chapter 11.

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, ~~2019~~2020 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 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, ~~2019~~2020 (the ~~"2019~~"2020 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") on February ~~25, 2020.~~26, 2021.

~~Certain prior period amounts have been reclassified to conform to current period presentation.~~In connection with the Chapter 11 Emergence and how the Company's chief operating decision maker ("CODM") regularly reviews operating results and allocates resources, the Company modified its reportable segments, as disclosed in Note 16, "Segment Information."

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

~~Adopted~~

~~Measurement of Credit Losses on Financial Instruments~~

In June 2016, the Financial Accounting Standards Board (the "FASB") issued guidance that sets forth a current expected credit loss impairment model for financial assets, which replaces the current incurred loss model, and issued amendments and updates to the new standard in 2018 and 2019. This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The Company adopted this guidance when effective, on January 1, 2020, using a modified retrospective transition method. The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or cash flows.

~~Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement~~

In August 2018, the FASB issued guidance on a customer's accounting for implementation fees paid in a cloud computing service contract arrangement that addresses which implementation costs to capitalize as an asset and which costs to expense. Capitalized implementation fees are to be expensed over the term of the cloud computing arrangement, and the expense is required to be recognized in the same line item in the income statement as the associated hosting service expenses. The entity is also required to present the capitalized implementation fees on the balance sheet in the same line item as the prepayment for hosting service fees associated with the cloud computing arrangement. The Company adopted this guidance when effective, on January 1, 2020, using a prospective transition method. The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or cash flows.

~~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 Company has hosting arrangements in connection with its Enterprise Resource Planning systems. Prior to the adoption of this guidance, the Company capitalized certain implementation costs for its hosting arrangements in intangible assets, net, in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2019. Subsequent to the adoption of this guidance on January 1, 2020, the Company records implementation fees incurred in connection with its hosting arrangements in prepaid expenses and other assets in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2020.

~~Simplifying the Accounting for Income Taxes~~

In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions in existing guidance and improves consistency in application by clarifying and amending existing guidance. This guidance is effective for annual periods beginning after December 15, 2020, and interim periods within those annual periods. On July 1, 2020, the Company adopted this guidance early, as permitted, on a prospective basis, where adjustments as of January 1, 2020 were not material; therefore adoption of this guidance had no material impact on the Company's financial position, results of operations or cash flows.

Not Yet Adopted

~~Facilitation of the Effects~~Scope of Reference Rate Reform

In ~~March 2020,~~January 2021, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued guidance that ~~provides optional expedients and exceptions~~clarifies that entities with derivative instruments affected by changes to the interest rates used for ~~contracts, hedging relationships and other transactions that reference LIBOR~~discounting, margining or ~~another reference rate expected to be discontinued~~contract price alignment due to reference rate reform ~~initiatives. This~~may elect to apply certain optional expedients and exceptions, including contract modification relief, provided in Topic 848. Entities may elect to apply the guidance ~~is effective~~on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 ~~through December 31, 2022 where~~or (2)

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

prospectively to new modifications from any date in an interim period that includes or is after January 7, 2021, up to the ~~transition method varies depending upon the specific expedient or exception.~~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 Donlen Sale. The proceeds from the sale were subject to certain post-closing adjustments in the second quarter of 2021 based on the level of assumed indebtedness, working capital and fleet equity. In the three and six months ended June 30, 2021, the Company recognized a pre-tax gain in its corporate operations of $8 million and $400 million, net of the impact of foreign currency adjustments, respectively, based on the difference in cash proceeds received of $891 million less $543 million net book value of assets sold plus a $53 million receivable in connection with the sale recorded in prepaid expenses and other assets in the accompanying unaudited condensed consolidated balance sheet as of June 30, 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.

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.~~Americas 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 ~~nine~~six months ended ~~September~~June 30, 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 ~~nine~~six months ended ~~September~~June 30, 2020.

~~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~~

Note 4—Revenue Earning Vehicles

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


(In millions)	(In millions)	September 30, 2020		December 31, 2019		(In millions)	June 30, 2021		December 31, 2020
Revenue earning vehicles	Revenue earning vehicles	$	11,060	$	16,626	Revenue earning vehicles	$	9,413	$	7,492
Less accumulated depreciation	Less accumulated depreciation	(2,892)		(3,159)		Less accumulated depreciation	(1,525)		(1,467)
		8,168		13,467			7,888		6,025
Revenue earning vehicles held for sale, net		283		322
Revenue earning vehicles held for sale, net(1)						Revenue earning vehicles held for sale, net(1)	102		37
Revenue earning vehicles, net	Revenue earning vehicles, net	$	8,451	$	13,789	Revenue earning vehicles, net	$	7,990	$	6,062

~~Depreciation~~(1) Represents the carrying amount of ~~revenue earning~~ vehicles ~~and lease charges includes~~currently placed on the ~~following:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Depreciation of revenue earning vehicles $ 525 $ 681 $ 1,687 $ 1,906
(Gain) loss on disposal of revenue earning vehicles, net (187) (33) (81) (73)
Lease charges 9 19 28 59
Depreciation of revenue earning vehicles and lease charges $ 347 $ 667 $ 1,634 $ 1,892
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

~~Technology-related Intangible and Other Assets~~

Due to uncertainty surrounding the Company's financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases as disclosed in Note 1, "Background," the Company concluded in the second quarter of 2020 that there was an impairment of such technology-related intangible assets and capitalized cloud computing implementation costs. In the second quarter of 2020, the Company recorded an impairment charge of $193 million in its corporate operations, representing a full impairment of the carrying value of such assets as of June 30, 2020 of $124 million and $69 million of technology-related intangible assets and other assets, respectively.

Recoverability of Goodwill and Indefinite-lived Intangible Assets

Due to the impact related to COVID-19, the Company's reduction in cash flow projections, the filing of the Chapter 11 Cases and declines in the stock price of Hertz Global, the Company tested the recoverability of its goodwill and indefinite-lived intangible assets as of June 30, 2020, and based on the quantitative test, no impairment was recorded in the second quarter of 2020. However, the fair values of certain tradenames, which are indefinite-lived intangible assets, in the Company's U.S. RAC and International RAC segments were in excess by 3% and 18% of the carrying values of $934 million and $560 million, respectively.

The Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by ~~Accounting Standards Codification~~ASC 350 – Intangibles, Goodwill and Other (“~~ASC~~Topic 350”). ~~The~~

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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. 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 of June 30, 2021, the Company determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases, were materially consistent with the assumptions utilized in the Company’s ~~June 30, 2020~~March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the

~~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~~

consideration of other indicators noted in ~~ASC~~Topic 350, the Company concluded there were no indicators of impairment triggered ~~in accordance with ASC 350~~for the Americas RAC or International RAC segments in the ~~third~~second quarter of ~~2020.~~2021.

~~Further deterioration~~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~~ 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 timing, do not materialize, or if its weighted average cost of capital increases, the Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

Note 6—Debt

The Company's debt, including its available credit facilities, consists of the following ($ in millions):

Facility

Weighted-Average Interest Rate
as of
September 30, 2020

Fixed or
Floating
Interest
Rate

Maturity

September 30,
2020

December 31,
2019

Facility

Weighted-Average Interest Rate
as of
June 30, 2021

Fixed or
Floating
Interest
Rate

Maturity

June 30,
2021

December 31,
2020

Non-Vehicle Debt

Senior Term Loan(1)

Floating

6/2023

660

Senior RCF(1)

Floating

6/2021

Senior Notes(1)(2)

Fixed

10/2022-1/2028

2,700

Senior Second Priority Secured Notes(1)

Fixed

6/2022

350

Promissory Notes(1)

Fixed

1/2028

Alternative Letter of Credit Facility(1)

Floating

11/2023

Senior RCF Letter of Credit Facility(1)

Floating

6/2021

Term B Loan

4.00%

Floating

6/2028

1,300

Term C Loan

4.00%

Floating

6/2028

245

First Lien RCF

N/A

Floating

6/2026

Other Non-Vehicle Debt

7.26%

Fixed

Various

Other Non-Vehicle Debt

8.60%

Fixed

Various

Senior Secured Superpriority Debtor-in-Possession Credit Agreement

N/A

250

Unamortized Debt Issuance Costs and Net (Discount) Premium

(34)

Unamortized Debt Issuance Costs and Net (Discount) Premium

(46)

(25)

Total Non-Vehicle Debt Not Subject to Compromise

3,721

Total Non-Vehicle Debt Not Subject to Compromise

1,514

243

Non-Vehicle Debt Subject to Compromise

Senior Term Loan

3.50%

Floating

6/2023

656

Senior Term Loan

N/A

656

Senior RCF

3.41%

Floating

6/2021

615

Senior RCF

N/A

615

Senior Notes(2)

6.11%

Fixed

10/2022-1/2028

2,700

Senior Notes(1)

N/A

2,700

Senior Second Priority Secured Notes

7.63%

Fixed

6/2022

350

Senior Second Priority Secured Notes

N/A

350

Promissory Notes

7.00%

Fixed

1/2028

Promissory Notes

N/A

Alternative Letter of Credit Facility(6)

5.25%

Floating

11/2023

Alternative Letter of Credit Facility(2)

N/A

114

Senior RCF Letter of Credit Facility

5.50%

Floating

6/2021

Senior RCF Letter of Credit Facility

N/A

Unamortized Debt Issuance Costs and Net (Discount) Premium

(37)

Unamortized Debt Issuance Costs and Net (Discount) Premium

(36)

Total Non-Vehicle Debt Subject to Compromise

4,404

2219

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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
September 30, 2020 Fixed or
Floating
Interest
Rate Maturity September 30,
2020 December 31,
2019
Vehicle Debt
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(3)(6)
3.36% Floating 3/2022 2,501 2,644
2,501 2,644
HVF II U.S. Vehicle Medium Term Notes
HVF II Series 2015-1(3)
N/A Fixed 3/2020 0 780
HVF II Series 2015-3(3)
3.44% Fixed 9/2020 207 371
HVF II Series 2016-2(3)
3.76% Fixed 3/2021 333 595
HVF II Series 2016-4(3)
3.44% Fixed 7/2021 237 424
HVF II Series 2017-1(3)
3.71% Fixed 10/2020 252 450
HVF II Series 2017-2(3)
4.10% Fixed 10/2022 207 350
HVF II Series 2018-1(3)
3.74% Fixed 2/2023 592 1,000
HVF II Series 2018-2(3)
4.17% Fixed 6/2021 119 200
HVF II Series 2018-3(3)
4.49% Fixed 7/2023 120 200
HVF II Series 2019-1(3)
4.23% Fixed 3/2022 418 700
HVF II Series 2019-2(3)
3.86% Fixed 5/2024 447 750
HVF II Series 2019-3(3)
3.11% Fixed 12/2024 446 800
3,378 6,620
Donlen U.S. ABS Program
HFLF Variable Funding Notes
HFLF Series 2013-2(4)(6)
6.11% Floating 10/2020-7/2022 382 286
382 286
HFLF Medium Term Notes
HFLF Series 2016-1(4)
N/A Both 1/2020-2/2020 0 34
HFLF Series 2017-1(4)
2.72% Both 10/2020-9/2022 115 229
HFLF Series 2018-1(4)
2.66% Both 10/2020-9/2022 292 462
HFLF Series 2019-1(4)
2.27% Both 10/2020-9/2022 456 650
863 1,375
Vehicle Debt - Other
U.S. Vehicle RCF N/A Floating 6/2021 0 146
European Vehicle Notes(5)
5.07% Fixed 10/2021-3/2023 846 810
European ABS(3)
1.60% Floating 11/2021 410 766
Hertz Canadian Securitization(3)(6)
3.68% Floating 3/2021 119 241
Donlen Canadian Securitization(3)
1.63% Floating 12/2022 27 24
Australian Securitization(3)
1.74% Floating 6/2021 106 177
New Zealand RCF 2.94% Floating 6/2021 37 50
U.K. Financing Facility 3.00% Floating 10/2020-8/2023 122 247
Other Vehicle Debt 3.60% Floating 10/2020-11/2024 28 29



Facility	Weighted-Average Interest Rate as of June 30, 2021	Fixed or Floating Interest Rate	Maturity	June 30, 2021		December 31, 2020
Total Non-Vehicle Debt Subject to Compromise				0		4,443
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A(3)	1.60%	Floating	06/2023	2,250		0

				2,250		0
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(3)	1.66%	Fixed	12/2024	2,000		0
HVF III Series 2021-2(3)	2.12%	Fixed	12/2026	2,000		0
				4,000		0
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(4)	N/A	N/A	N/A	0		1,940
				0		1,940
HVF II U.S. Vehicle Medium Term Notes

HVF II Series 2015-3	N/A	N/A	N/A	0		163
HVF II Series 2016-2	N/A	N/A	N/A	0		263
HVF II Series 2016-4	N/A	N/A	N/A	0		187
HVF II Series 2017-1	N/A	N/A	N/A	0		199
HVF II Series 2017-2	N/A	N/A	N/A	0		164
HVF II Series 2018-1	N/A	N/A	N/A	0		468
HVF II Series 2018-2	N/A	N/A	N/A	0		94
HVF II Series 2018-3	N/A	N/A	N/A	0		95
HVF II Series 2019-1	N/A	N/A	N/A	0		330
HVF II Series 2019-2	N/A	N/A	N/A	0		354
HVF II Series 2019-3	N/A	N/A	N/A	0		352
				0		2,669













Vehicle Debt - Other

European Vehicle Notes(5)	N/A	N/A	N/A	0		888
European ABS(3)	2.50%	Floating	4/2022	283		263
Hertz Canadian Securitization(3)	2.44%	Floating	1/2023	170		53

Australian Securitization(3)	1.66%	Floating	4/2022	115		97
New Zealand RCF	2.94%	Floating	6/2022	39		35
U.K. Financing Facility	3.59%	Floating	7/2021-5/2024	118		105
U.K. Toyota Financing Facility	2.20%	Floating	7/2021-3/2022	12		0
Other Vehicle Debt	3.04%	Floating	7/2021-11/2024	82		37
				819		1,478
Unamortized Debt Issuance Costs and Net (Discount) Premium				(34)		(63)




Total Vehicle Debt Not Subject to Compromise				7,035		6,024
Total Debt Not Subject to Compromise				$	8,549	$	6,267

2320

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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
September 30, 2020 Fixed or
Floating
Interest
Rate Maturity September 30,
2020 December 31,
2019
1,695 2,490
Unamortized Debt Issuance Costs and Net (Discount) Premium (66) (47)
Total Vehicle Debt Not Subject to Compromise 8,753 13,368
Total Debt Not Subject to Compromise $ 8,771 $ 17,089

~~N/A - Not applicable~~

(1)As a result of filing the Chapter 11 Cases, certain debt was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2020. The weighted-average interest rate for such debt is disclosed in subsequent rows under "non-vehicle debt subject to compromise".

~~(2)~~References to the "Senior Notes" include the series of Hertz's unsecured senior notes set forth in the table below which are included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance ~~sheet~~sheets as of ~~September 30,~~December 31, 2020. ~~Outstanding principal amounts for each such series~~On the Effective Date, in accordance with the Plan of Reorganization, the Senior Notes ~~is also specified below:~~were repaid in full and terminated. On July 1, 2021, Wells Fargo Bank, National Association as indenture trustee for the Senior Notes, filed a complaint against Hertz and certain of its subsidiaries requesting declaratory judgement that additional amounts are owed with respect to certain premiums and post-petition interest with respect to the Senior Notes. Hertz disputes that any such amounts are owed and on August 2, 2021 filed a motion to dismiss the complaint. See Note 14, "Contingencies and Off-Balance Sheet Commitments" for additional information.

(In millions) Outstanding Principal
Senior Notes September 30, 2020 December 31, 2019
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

Senior Notes	June 30, 2021		December 31, 2020
6.250% Senior Notes due October 2022	$	0	$	500
5.500% Senior Notes due October 2024	0		800
7.125% Senior Notes due August 2026	0		500
6.000% Senior Notes due January 2028	0		900
	$	0	$	2,700

(2)Includes default interest as of December 31, 2020.

(3)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. Refer to the HVF II amortization event as described below, where the expected maturity is based on the sale of the underlying vehicles and payments under the Interim Lease Order or the refinancing of the current debt.

(4)~~In the case~~Includes default interest as of the Hertz Fleet Lease Funding LP ("HFLF") Medium Term Notes, such notes are repayable from cash flows derived from third-party leases comprising the underlying HFLF collateral pool. As a result of the Chapter 11 Cases and the resulting amortization events, as described below, the revolving period for all series were terminated, and are amortizing monthly by an amount equal to the lease collections payable to that series and the maturity date referenced for each series of HFLF Medium Term Notes represents the date by which Hertz expects such series of notes to be repaid in full,December 31, 2020, which is ~~based upon~~comprised of an increase in the contractual amortization of the underlying leases as well as the assumed rate of prepayments of such leases. Such maturity reference is to the “expected final maturity date” as opposed to the subsequent “legal final maturity date.” The legal final maturity date is the date on which the relevant indebtedness is legally due and payable. Although the underlying lease cash flows that support the repayment of the HFLF Medium Term Notes may vary, the cash flows generally are expected to approximate a straight-line amortization of the related notes from the initial maturity date through the expected final maturity date.

spread.

(5)References to 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 of the Netherlands, ("Hertz Netherlands") unsecured senior notes (converted from Euros to U.S. ~~dollars~~Dollars at a rate of ~~1.17 to 1 and 1.12~~1.22 to 1 as of ~~September 30, 2020 and~~ December 31, ~~2019, respectively)~~2020), set forth in the table below. ~~Outstanding principal amounts for each such series~~On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes ~~is also specified below:~~were repaid in full and cancelled.


(In millions)	(In millions)	Outstanding Principal				(In millions)	Outstanding Principal

European Vehicle Notes	European Vehicle Notes	September 30, 2020		December 31, 2019		European Vehicle Notes	June 30, 2021		December 31, 2020
4.125% Senior Notes due October 2021	4.125% Senior Notes due October 2021	$	263	$	251	4.125% Senior Notes due October 2021	$	0	$	276
5.500% Senior Notes due March 2023	5.500% Senior Notes due March 2023	583		559		5.500% Senior Notes due March 2023	0		612
		$	846	$	810		$	0	$	888

~~(6) Includes default interest which is comprised of an increase in the contractual spread~~Chapter 11 and ~~may also include a change in the benchmark rate from the U.S. Dollar LIBOR rate to the prime rate.~~

~~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~~

~~Chapter 11~~Emergence

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 ~~sheet~~sheets as of ~~September 30,~~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 in kind an amount equal to the monthly interest at the non-default rate for the Senior Second Priority Secured Notes as of July 1, 2020. On August 25, 2020, the Bankruptcy Court entered an order, which among other things, directed that on December 1, 2020, the Company is to pay in cash an amount equal to half of the interest that would have accrued on the Senior Second Priority Secured Notes during the period July 1, 2020 through November 30, 2020. On October 29, 2020, the Bankruptcy Court entered an order, which among other things, directed the Company to pay in cash an amount equal to the monthly interest that would have accrued on the First Lien Facilities during the period May 1, 2020 through June 30, 2020 upon entry of the DIP Order as defined below.

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 U.S. Vehicle~~ 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 ("HIL"), Hertz ~~Holdings~~ Netherlands ~~BV ("Hertz Netherlands")~~ and the direct and indirect subsidiary companies located outside of the United States and Canada (collectively the "International Subsidiaries") ~~(some~~, some of which were waived or amended subject to certain time limitations, ~~as disclosed further below),~~ and (ii) HVF, HVF II ~~HFLF~~ and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

As disclosed in Note 1, "Background," on May 14, 2021, the Debtors filed the Plan of Reorganization with the Bankruptcy Court, which was confirmed by the Bankruptcy Court on June 10, 2021. On the Effective Date, the Company emerged from Chapter 11 as disclosed in Note 1, "Background" and, in accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program and the HVIF U.S. ABS Program were repaid in full and cancelled, as further disclosed below. Upon the Debtor's emergence from Chapter 11 and the associated debt payoffs, any events of default, termination and/or amortization events ceased to exist.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Non-Vehicle Debt

First Lien Credit Agreement

Pursuant to the Plan of Reorganization, on the Effective Date, Hertz entered into a credit agreement (the "First Lien Credit Agreement") that provides for the following:

•a term loan "B" facility (the "Term B Loan") for term loans in an aggregate principal amount of $1.3 billion;

•a term loan "C" facility (the "Term C Loan") for term loans that are available to cash collateralize letters of credit in an aggregate principal amount of $245 million; and

•the First Lien RCF for revolving loans and letters of credit up to an aggregate principal amount of $1.3 billion.

Proceeds received under the First Lien Credit Agreement were used to (i) repay certain existing indebtedness of the Debtors; (ii) pay fees, expenses and costs associated with the consummation of the Plan of Reorganization; (iii) fund distributions required in connection with the Plan of Reorganization; (iv) provide funds for working capital and general corporate purposes; and (v) backstop or replace existing letters of credit.

Term B Loan and Term C Loan (collectively, the "Term Loans"): The Term Loans bear interest based on an alternate base rate as per the First Lien Credit Agreement or adjusted LIBOR, in each case plus an initial applicable margin of (i) 2.50% in the case of the alternate base rate, or (ii) 3.50% in the case of the adjusted LIBOR. In each case, the margin may decrease depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio"). The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $3.3 million per quarter beginning on September 30, 2021 until maturity. The Term Loans mature on June 30, 2028.

First Lien RCF: The First Lien RCF bears interest, at a benchmark rate plus spread. Loans under the facility are available in various currencies including USD, Eurodollar, Australian dollar, Canadian dollar and Sterling. Benchmark rates for the relevant currencies include, the relevant LIBOR rate, the Prime rate, the Bank Bill Swap Reference Bid Rate for Australian dollars, Canadian prime rate, an adjusted Canadian Dollar Offered Rate ("CDOR") or the Daily Simple Sterling Overnight Index Average ("SONIA"). ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50%. The margin for Eurocurency Loans (including USD loans), SONIA loans and Canadian dollar BA Equivalent Loans, as defined in the First Lien Credit Agreement, is dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement. As of June 30, 2021, that margin was 3.50%. In each case, the margin may decrease depending on Hertz’s Total Corporate Leverage Ratio. The First Lien Credit Agreement requires the First Lien RCF to be repaid in quarterly installments beginning on September 30, 2021 until maturity. The First Lien RCF matures on June 30, 2026.

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

On ~~October 15, 2020, Hertz entered into a commitment letter for debtor-in-possession financing (the “DIP Commitment Letter”)~~the Effective Date, in accordance with the ~~holders~~Plan of ~~a majority~~Reorganization, the DIP Credit Agreement was paid in aggregate outstanding amount of its Pre-petition first-lien debt (collectively, the “Initial Commitment Parties”) pursuant to which the Initial Commitment Parties committed to backstop a superpriority senior secured debtor-in-possession, non-amortizing, delayed draw term loan facility (the “DIP Facility”) in an aggregate amount of $1.65 billion under Section 364 of the Bankruptcy Code, subject to the termsfull and conditions set forth in the Initial Commitment Letter. The Initial Commitment Letter was amended on October 28, 2020 to add certain additional commitment parties (together with the Initial Commitment Parties, the “Commitment Parties”).terminated.

Senior Facilities

On ~~October 29, 2020,~~ the ~~Bankruptcy Court entered an order authorizing the Debtors to obtain certain debtor-in-possession financing (the "DIP Order"). In~~Effective Date, in accordance with the ~~Bankruptcy Court's order, on October 30, 2020, Hertz, as borrower,~~Plan of Reorganization, the Senior Term Loan, the Senior RCF and ~~Hertz Global~~drawn amounts under the Senior RCF Letter of Credit Facility and ~~certain~~Letter of ~~its subsidiaries located~~Credit Facility were paid in ~~the United States~~full and Canada, in each case that are debtors in these Chapter 11 Cases, as guarantors (collectively, the “DIP Debtors”), entered into the DIP Credit Agreement with the financial institutions identified therein as lenders and Barclays Bank PLC as administrative agent. The DIP Credit Agreement provides for DIP Loans, of which (i) up to $1.0 billion can be used as equity for new interim fleet financing, giving the DIP Debtors the ability to replenish their vehicle fleet in the future, and (ii) up to $800 million can be used for working capital and general corporate purposes. The DIP Loans are available in multiple draws of at least (i) $250 million each, or (ii) the remaining available commitments if such commitments are less than $250 million. The DIP Loans bear interest at a rate of LIBOR plus 7.25% (subject to a 1.00% floor), which is reduced to LIBOR plus 6.75% upon a significant repayment of Pre-petition first lien debt.terminated.

Senior Notes and Senior Second Priority Secured Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Company's Senior Notes and Senior Second Priority Secured Notes were paid in full and terminated.

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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 DIP~~

Promissory Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Promissory Notes were paid in full and terminated.

Alternative Letter of Credit Facility ~~matures on December 31,~~

On the Effective Date, in accordance with the Plan of Reorganization, the Alternative Letter of Credit Facility was paid in full and terminated.

HIL Credit Agreement

In April 2021, ~~and has limited covenants and events~~Hertz International Limited ("HIL") entered into a multi-draw term loan facility (the "HIL Credit Agreement") which provided an aggregate maximum principal of ~~default, including one milestone requiring~~€250 million to meet the ~~filing~~liquidity requirements of the European business.

In May 2021, resulting from a change in the Company's plan of reorganization sponsorship, the HIL Credit Agreement was terminated and HIL entered into a new multi-draw term loan facility (the "Second HIL Credit Agreement") which also provided for an aggregate maximum principal of €257 million which was funded by ~~August 1, 2021. The DIP Facility will be secured by first priority liens on substantially all~~certain of the ~~DIP Debtors’ assets (subject to certain exclusions) and has~~Plan Sponsors. On the ~~support~~Effective Date, in accordance with the Plan of Reorganization, the requisite majority of the DIP Debtors’ first lien Pre-petition debt to allow for consensual priming of existing liens. The DIP Facility does not contain a roll-up or cross-collateralization of Pre-petition debt or otherwise dictate how Pre-petition claims will be addressed in a plan of reorganization.

~~The DIP~~Second HIL Credit Agreement ~~includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the loan parties~~was paid in full and their subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sales of assets and acquisitions, pay dividends and distributions and make payments in respect of junior or Pre-petition indebtedness, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type. The DIP Credit Agreement also includes conditions precedent, representations and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings of this type. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of title 11 of the United States Code, the appointment of a trustee pursuant to chapter 11 of title 11 of the United States Code, and certain other events related to the impairment of the lenders’ rights or liens granted under the DIP Credit Agreement.terminated.

Vehicle Debt

HVF IIIII U.S. ABS Program

In June 2021, Hertz established a securitization platform, the HVF IIIII U.S. ABS Program, to facilitate its financing activities relating to vehicles used by Hertz in the U.S. daily vehicle rental operations. Hertz Vehicle Financing III LLC ("HVF III"), a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF III U.S. ABS Program. HVF III has entered into a base indenture that permits it to issue term and variable funding rental car asset-backed securities, secured by a collateral pool consisting primarily of the rental vehicles used in the Company's U.S. vehicle rental operations and the related incentive and repurchase program vehicle receivables. Within each series of HVF III U.S. Vehicle Medium Term Notes, the issued notes are subordinated based on class.

Pursuant to the Plan of Reorganization, in June 2021, HVF III issued Series 2021-A Variable Funding Rental Car Asset Backed Notes (the "Series 2021-A Notes"), the Series 2021-1 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-1 Notes") and the Series 2021-2 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-2 Notes" and, together with the Series 2021-A Notes and the Series 2021-1 Notes, the “HVF III ABS Notes”).

HVF IIIII Series ~~2013-A Notes~~2021-A Notes: : In ~~February 2020, HVF II extended the maturity of~~June 2021, Hertz issued the Series ~~2013-A~~2021-A Notes ~~from March 2021 to March 2022 and increased the commitments thereunder by $750 million. After giving effect to the transactions, the aggregate~~with a maximum principal amount of ~~the Series 2013-A Notes was $4.9~~up to $2.8 billion ~~where $0.2 billion of commitments have~~and a maturity date of ~~March 2021.~~June 2023.

~~As a result of~~HVF III Series 2021-1 Notes: On the ~~failure to make the full rent payments on April 27, 2020, an amortization event was in effect as of May 5, 2020 for all series of notes~~Effective Date, Hertz issued ~~by HVF II and a liquidation event was in effect with respect to~~ the Series ~~2013-A~~2021-1 Notes ~~issued by HVF II. As a result of the amortization event, proceeds from the sales of vehicles that collateralize the notes issued by HVF II must be primarily applied to the payment of~~in four classes (Class A, Class B, Class C and Class D) in an aggregate principal and are allocated on what approximates a pro rata basis to the reduction of principal on the basis of seniority by class. As disclosed in Note 1, "Background," per the terms of the Interim Lease Order entered on July 24, 2020, the Debtors were directed, among other things, to make $650 million of base rent payments under the Operating Lease to the HVF trustee in the amount of ~~six equal monthly payments of approximately $108 million commencing in July 2020 through December 2020. The parties have agreed to defer litigation related to~~$2.0 billion. There is subordination within the ~~Operating Lease until January 15, 2021. HVF II is accruing default interest, while non-default interest is being paid~~Series 2021-1 Notes based 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.~~class.

HVF III Series 2021-2 Notes: On the Effective Date, Hertz issued the Series 2021-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $2.0 billion. There is subordination within the Series 2021-2 Notes based on class.

In June 2021, in connection with the issuance of the HVF III ABS Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a

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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

lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.

Proceeds from the HVF III ABS Notes were used to fund the purchases of certain vehicles and for the repayment in full of (i) approximately $3.5 billion in aggregate outstanding principal of notes issued by HVF II, as described below, and (ii) approximately $2.2 billion in aggregate outstanding principal of notes issued by Hertz Vehicle Interim Financing, a direct wholly-owned bankruptcy remote subsidiary of Hertz ("HVIF"). The manufacturer rebates associated with HVF and HVIF were transferred to HVF III as part of the purchase agreements with HVF and HVIF. Any remaining funds are expected to be used for the future purchase or refinancing of vehicles to be leased under the Operating Lease.

HVF II U.S. ABS Program

On the Effective Date, in accordance with the Plan of Reorganization, all HVF II U.S. Vehicle Medium Term Notes and HVF II Variable Funding Notes were paid in full and terminated. Any and all outstanding Bankruptcy Court orders and other agreements relating to HVF II were terminated on the Effective Date as a result of the termination of the notes.

~~In March 2020, HVF II sold the below notes, which it had acquired at the time of the respective initial offerings and which were previously eliminated in consolidation, to third parties.~~


~~(In millions)~~	~~Aggregate Principal Amount~~
~~HVF II Series 2017-2 Class D Notes~~	$	20
~~HVF II Series 2018-1 Class D Notes~~	58
~~HVF II Series 2018-2 Class D Notes~~	13
~~HVF II Series 2018-3 Class D Notes~~	13
~~HVF II Series 2019-1 Class D Notes~~	45
~~HVF II Series 2019-2 Class D Notes~~	49
~~Total~~	$	~~198~~

~~New Facility - Fleet Financing~~

~~Donlen~~HVIF U.S. ABS Program

~~HFLF Variable Funding Notes~~On the Effective Date, in accordance with the Plan of Reorganization, the HVIF Series 2020-1 was paid in full and terminated.

~~HFLF Series 2013-2 Notes~~: In February 2020, HFLF amended the HFLF Series 2013-2 Notes ("2013-2 Notes") to extend the end of the revolving period from March 2021 to March 2022 and increased the commitments thereunder by $100 million, such that the aggregate maximum borrowings of the 2013-2 Notes increased to $600 million.

The filing of the Chapter 11 Cases triggered an amortization event under the HFLF Variable Funding Notes and the HFLF Medium Term Notes. As a result, the remaining commitments under the HFLF Series 2013-2 Notes were terminated and, while the amortization events continue, proceeds from lease payments and from the sales of vehicles that collateralize the notes issued by HFLF must be applied to the reduction of principal and payment of interest on the notes. The principal will be allocated on approximately a pro rata basis and distributed to the note holders on the basis of seniority by class. HFLF is accruing default interest, while non-default interest is being paid on the HFLF Variable Funding Notes and the HFLF Medium Term Notes.

~~DFLF Variable Funding Notes~~

On October 12, 2020, the Bankruptcy Court entered an order authorizing Hertz and Donlen Corporation to enter into certain agreements in connection with a new asset-based securitization facility with a newly formed non-Debtor special purpose entity, DFLF. On October 16, 2020, DFLF issued the Series 2020-1 Notes to offset funding needs created by the amortization of the HFLF Variable Funding Notes disclosed above, where DFLF will fund lease originations going forward.~~As of the closing date in October 2020, DFLF will have access to up to up to $400 million of available funding subject to certain conditions.Currently, DFLF has $200 million of committed funding available, subject to the payment of incremental up-front fees.~~

Vehicle Debt-Other

European Vehicle Notes

On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were paid in full and terminated.

European ABS

In April 2021, International Fleet Financing No. 2 BV ("IFF No. 2") entered into a comprehensive restructuring of the European ABS. The terms of the restructured European ABS provide for aggregate maximum borrowings of €450 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, the guarantees given by Hertz relating to the restructured European ABS, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

Hertz Canadian Securitization

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, in part, to pay the 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.

Australian Securitization

An amortization event that would have arisen under the Australian Securitization as a result of the filing of the Chapter 11 Cases ~~constituted defaults, termination events and/or amortization events with respect to certain~~was waived in May 2020, and, in June 2021, such waiver has been superseded by an amendment of the ~~Company's existing debt obligations, as described below.~~Australian Securitization. The terms of the amended Australian Securitization provide for aggregate maximum borrowings of AUD$210 million and extend the maturity to April 2022. In accordance with the

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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

Plan of Reorganization, the guarantees given by Hertz relating to the restructured Australian Securitization, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

~~U.S. Vehicle Revolving Credit Facility~~New Zealand RCF

In ~~August 2020,~~May 2021, Hertz ~~terminated the U.S. Vehicle Revolving Credit Facility by utilizing available cash to pay in full amounts outstanding of $93 million.~~

~~European Vehicle Notes~~

Hertz Netherlands and certain other international subsidiaries entered into a limited waiver agreement in respect of the European Vehicle Notes pursuant to which the majority noteholders agreed to waive any default or event of default that could have resulted from the Chapter 11 Cases with an expiration of September 30, 2020.

On September 30, 2020, Hertz Netherlands and certain other international subsidiaries entered into an extension of the waiver agreement with respect to the European Vehicle Notes which expires on December 31, 2020, or earlier if certain conditions are not met.

~~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 International Fleet Financing No.2 B.V (“IFF No. 2”) entered into a waiver agreement with an expiration of September 30, 2020 such that the aggregate maximum borrowings were reduced from €1.1 billion to €600 million.

Effective October 1, 2020, IFF No. 2 entered into an extension of the waiver agreement under the European ABS (the "European Waiver") through December 31, 2020, or earlier if certain conditions are not met. Under the European Waiver, aggregate maximum borrowings cannot exceed (i) €351 million from September 30, 2020 to October 30, 2020, (ii) €310 million from October 31, 2020 to November 5, 2020, (iii) €300 million from November 6, 2020 to November 29, 2020, (iv) €280 million from November 30, 2020 to December 3, 2020 and (v) €270 million from and including December 4, 2020.

~~Hertz Canadian Securitization~~

The filing of the Chapter 11 Cases triggered an amortization event under the Hertz Canadian Securitization. As a result, the remaining committed available borrowings were terminated and proceeds from the sales of vehicles and receipt of vehicle receivables that collateralize the Hertz Canadian Securitization must be applied to the payment of principal.

On September 23, 2020, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz entered into an interim agreement under the Hertz Canadian Securitization in which default interest will be paid.

~~Donlen Canadian Securitization~~

The filing of the Chapter 11 Cases triggered an event of default under the Donlen Canadian Securitization. In June 2020, Donlen entered into a waiver agreement under the Donlen Canadian Securitization with an expiration of August 28, 2020 such that the aggregate maximum borrowings were reduced from CAD$50 million to CAD$37 million.

In August 2020, Donlen entered into an extension of the waiver agreement under the Donlen Canadian Securitization with an expiration of October 29, 2020. In October 2020, the waiver agreement was extended an additional 60 days and expires on December 29, 2020.

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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~~

~~Australian Securitization~~

~~An amortization event that would have arisen under the Australian Securitization as a result of filing the Chapter 11 Cases was waived in May 2020 as HA Fleet Pty~~New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, ~~entered into a permanent waiver~~amended its credit agreement ~~under the Australian Securitization such that the~~to provide aggregate maximum ~~borrowing capacity was reduced from AUD$270~~borrowings of NZD$60 million and to ~~AUD$210 million.~~extend the maturity to June 2022.

U.K. Financing Facility

~~In April 2020, the aggregate maximum borrowing capacity under the U.K. Financing Facility was reduced from £250 million to £200 million as result of a downgrade in the credit rating of Hertz.~~ Events of default that would have arisen under the U.K. Financing Facility as a result of filing the Chapter 11 Cases were waived in May 2020 as(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 £100 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, guarantees given by Hertz relating to the restructured U.K. Financing Facility, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

U.K. Toyota Financing Facility

In May 2021, Hertz U.K. Limited entered into ~~a waiver agreement under~~ the U.K. Toyota Financing Facility to finance the acquisition of certain motor vehicles which ~~expired on September~~provides for aggregate maximum borrowings of £10 million maturing in December 2021.

Maturities

As of June 30, ~~2020, and on October 1, 2020, Hertz U.K. Limited entered into an extension~~2021, the nominal amounts of maturities of debt for each of the ~~waiver agreement under the U.K. Financing Facility which expires on~~years ending December 31 ~~2020,~~ are as follows:


(In millions)	2021		2022		2023		2024		2025		After 2025
Non-Vehicle Debt	$	9	$	19	$	18	$	14	$	13	$	1,487
Vehicle Debt	74		543		2,440		2,012		0		2,000
Total	$	83	$	562	$	2,458	$	2,026	$	13	$	3,487

As of June 30, 2021, $19 million of non-vehicle debt and $561 million of vehicle debt is set to mature during the twelve months following the issuance of this Quarterly Report on Form 10-Q.

Loss on Extinguishment of Debt

The Company incurred losses in the form of early redemption premiums and/or ~~earlier if~~the write-off of deferred financing costs associated with certain ~~conditions are not met. Under~~redemptions, terminations and waiver agreements. Loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the ~~waiver agreement,~~table below, in the ~~aggregate maximum borrowing capacity under~~accompanying unaudited condensed consolidated statements of operations for the ~~U.K. Financing Facility was reduced to £110 million.~~three and six months ended June 30, 2021.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

The following table reflects the amount of loss for each respective redemption/termination:



	Three Months Ended June 30,				Six Months Ended June 30,
Redemption/Termination (in millions)	2021		2020		2021		2020
Non-Vehicle Debt
HIL Credit Agreement(1)	$	8	$	0	$	8	$	0
Second HIL Credit Agreement	5		0		5		0

Total Non-Vehicle Debt	13		0		13		0
Non-Vehicle Debt
Senior Term Loan	16		0		16		0
Senior RCF	22		0		22		0
Senior Notes	29		0		29		0
Senior Second Priority Secured Notes	4		0		4		0
Promissory Notes	2		0		2		0
Alternative Letter of Credit Facility	7		0		7		0

Letter of Credit Facility	8		0		8		0
Total Non-Vehicle Debt	88		0		88		0
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes	9		0		9		0
HVF II U.S. Vehicle Medium Term Notes	39		0		39		0
HVIF Series 2020-1	21		0		21		0
European Vehicle Notes	29		0		29		0
European ABS(2)	0		3		0		3
Total Vehicle Debt	98		3		98		3
Total Loss on Extinguishment of Debt	$	199	$	3	$	199	$	3

(1) The loss on extinguishment associated with the HIL Credit Agreement is recorded in non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.

(2) The loss on extinguishment associated with the European ABS is recorded in vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2020.

Borrowing Capacity and Availability

Borrowing capacity and availability comes from the Company's ~~"revolving~~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"facilities, which are a combination of variable funding asset-backed securitization facilities, cash-flow-based revolving credit facilities, ~~and~~ asset-based revolving credit ~~facilities.~~facilities and 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. With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing 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).

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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 following facilities were available to the Company as of ~~September~~June 30, ~~2020~~2021 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
Letter of Credit Facility(1)
0 0
Alternative Letter of Credit Facility(1)
0 0
Total Non-Vehicle Debt 0 0
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes(1)
0 0
HFLF Variable Funding Notes(1)
0 0
European ABS 291 0
Hertz Canadian Securitization(1)
0 0
Donlen Canadian Securitization 1 0
Australian Securitization 42 0
U.K. Financing Facility 134 0
New Zealand RCF 12 2
Total Vehicle Debt 480 2
Total $ 480 $ 2

~~(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.~~



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


First Lien RCF	$	1,255	$	1,185
Total Non-Vehicle Debt	1,255		1,185
Vehicle Debt
HVF III Series 2021-A	562		179

European ABS	254		0
Hertz Canadian Securitization	113		9
Australian Securitization	44		0
New Zealand RCF	4		0
U.K. Financing Facility	21		0
U.K. Toyota Financing Facility	2		1
Total Vehicle Debt	1,000		189
Total	$	2,255	$	1,374

Letters of Credit

On the Effective Date, in accordance with the Plan of Reorganization, drawn letters of credit under the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility were paid in full and terminated. To the extent any of the related issued letters of credit remained outstanding as of the Effective Date, certain of these letters of credit were deemed to be issued under the First Lien RCF. For the remainder, the Company provided cash collateral to backstop these obligations. The Company intends to replace or exchange any remaining outstanding letters of credit with newly issued letters of credit under the Term C Loan or the First Lien RCF as soon as practicable during the third quarter of 2021.

As of ~~September 30, 2020,~~the Effective Date, there were outstanding standby letters of credit totaling ~~$736 million.~~$265 million comprised primarily of $114 million issued under the Term C Loan and $70 million were deemed issued under the First Lien RCF as discussed above. Also included in the outstanding standby letters of credit are $66 million under the Senior RCF Letter of Credit Facility that were cash collateralized in restricted cash as of June 30, 2021. As of June 30, 2021, there remains $131 million of remaining 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 asset-backed securitization facilities. Of this amount, $231 million were issued under the Senior RCF, $299 million were issued under the Letter of Credit Facility and $200 million were issued under the Alternative Letter of Credit Facility. As of ~~September~~June 30, ~~2020, $11 million and $82 million~~2021, none of the issued letters of credit have been drawn upon under the Senior RCF and Alternative Letter of Credit Facility, respectively, to fund interest payments due under the HVF II Notes. The draws remain unreimbursed by the Company, and, except as otherwise set forth in orders from the Bankruptcy Court, as a result are accruing interest at the non-default rate.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 Financing~~III LLC ~~Rental Car Finance LLC, HFLF~~ 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 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,~~beneficiary; therefore,

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Unaudited

the assets, liabilities and results of operations of IFF No. 2 are included in the accompanying unaudited condensed consolidated financial statements. As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, IFF No. 2 had total assets of ~~$640~~$692 million and ~~$1.1 billion,~~$464 million, respectively, comprised primarily ~~comprised~~ of loans receivable, and total liabilities of ~~$640~~$691 million and ~~$1.1 billion,~~$464 million, respectively, comprised primarily ~~comprised~~ of debt.

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~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

Covenant Compliance

~~Prior~~The First Lien Credit Agreement requires Hertz to comply with the ~~filing~~following financial covenants: (i) until the expiration of the ~~Chapter 11 Cases, the financial covenant provided that Hertz’s consolidated first lien net leverage ratio (the "Leverage Ratio"),~~Relief Period, as defined in the ~~credit agreements governing~~First Lien Credit Agreement, a minimum liquidity of $500 million in the ~~Senior RCF,~~first and last quarters of the ~~Letter~~calendar year and $400 million in the second and third quarters of the calendar year; and (ii) subsequent to the expiration of the Relief Period, a consolidated first lien leverage ratio (the "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. Both of the financial covenants disclosed above are effective beginning in the third quarter of 2021.

In addition to financial covenants, the First Lien Credit ~~Facility~~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 ~~Alternative Letter~~granting of ~~Credit Facility, as~~security interest for the benefit of the ~~last day~~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 ~~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~~liens, indebtedness, asset dispositions and ~~the Alternative Letter of Credit Facility, and the Company is in breach of the Leverage Ratio.~~restricted payments.

Note 7—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 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.

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

~~As a result~~In the first half of the impact from COVID-19 as disclosed in Note 1, "Background," the Company received rent concessions in the form of abatement and payment deferrals of fixed and variable rent payments for its airport and off airport locations in the amount of $84 million and $221 million for the three and nine months ended September 30, 2020, respectively, which represent amounts previously due in the period between March 1, 2020 and September 30, 2020. 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 September 2020,~~2021, the Bankruptcy Court ~~approved~~entered orders rejecting certain of the Company's real property leases under Section 365 of the Bankruptcy Code (the "Lease Rejection Orders"). The Lease Rejection Orders ~~which authorized~~applied, in the ~~rejection of certain unexpired leases comprised of 257~~aggregate, to 278 off airport and 1534 airport locations in the Company's U.S. RAC segment. In October 2020, the Bankruptcy Court approved the October Lease Rejection Orders which authorized the rejection of certain unexpired leases comprised of 29 airport and 24 off airport locations in the Company's U.S.Americas RAC segment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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 September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2020		2019		2020		2019		(In millions)	2021		2020		2021		2020
Operating lease income from vehicle rentals	Operating lease income from vehicle rentals	$	1,037	$	2,516	$	3,278	$	6,555	Operating lease income from vehicle rentals	$	1,798	$	604	$	2,896	$	2,241
Operating lease income from fleet leasing	Operating lease income from fleet leasing	155		174		485		499		Operating lease income from fleet leasing	0		161		149		330
Variable operating lease income	Variable operating lease income	0		46		34		124		Variable operating lease income	39		1		40		34
Revenue accounted for under Topic 842	Revenue accounted for under Topic 842	1,192		2,736		3,797		7,178		Revenue accounted for under Topic 842	1,837		766		3,085		2,605
Revenue accounted for under Topic 606	Revenue accounted for under Topic 606	76		100		226		276		Revenue accounted for under Topic 606	36		66		76		150
Total revenues	Total revenues	$	1,268	$	2,836	$	4,023	$	7,454	Total revenues	$	1,873	$	832	$	3,161	$	2,755

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 approximately 150 employees and in the second quarter of 2021 initiated additional actions in its International RAC segment, primarily the United Kingdom, affecting approximately 480 employees. The program is expected to be completed within the next twelve months.

U.S. Restructuring

Due to the impact from COVID-19 as disclosed in Note 1, "Background," the Company initiated a restructuring program, beginning in April 2020, affecting approximately 11,000 employees in its ~~U.S.~~Americas Rental Car segment and corporate ~~operations and incurred approximately $37 million of charges for termination benefits during~~operations. This program was substantially completed in the ~~second~~third quarter of 2020, where $7 million was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2020 as disclosed below. This program is expected to be completed within the next twelve months.2020.

No termination charges were incurred during the three months ended September 30, 2020. The following tables summarize restructuring charges under this program incurred during the nine months ended September 30, 2020:

Restructuring Charges


~~(In millions)~~	Nine Months Ended September 30, 2020
~~Termination charges:~~
~~Direct vehicle and operating~~	$	25
~~Selling, general and administrative~~	12
~~Total~~	$	37

Restructuring charges under these programs were as follows:


~~(In millions)~~	Nine Months Ended September 30, 2020
~~Termination charges:~~
~~U.S. Rental Car Segment~~	$	34


~~Corporate operations~~	3
~~Total~~	$	37

~~The tables above do not include pension-related settlement charges incurred during the nine months ended September 30, 2020. See Note 11, "Employee Retirement Benefits".~~



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
By Type:
Termination benefits	$	7	$	37	$	13	$	37
Lease and contract terminations	2		0		3		0
Facility closures	1		0		1		0

Total	$	10	$	37	$	17	$	37

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
By Caption:
Direct vehicle and operating	$	9	$	25	$	9	$	25
Selling, general and administrative	1		12		8		12
Total	$	10	$	37	$	17	$	37



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
By Segment:
Americas Rental Car segment	$	0	$	34	$	0	$	34
International Rental Car segment	10		0		17		0

Corporate operations	0		3		0		3
Total	$	10	$	37	$	17	$	37

The following table summarizes the activity during the six months ended June 30, 2021 affecting the restructuring accrual, which is recorded in accrued liabilities ~~or was reclassified to liabilities subject to compromise~~ in the accompanying unaudited condensed consolidated balance ~~sheet, during the nine months ended September 30, 2020.~~sheets.

~~(In millions)~~

Termination
Benefits

~~Balance as of December 31, 2019~~

~~Charges incurred~~

~~Cash payments~~

~~(28)~~

~~Liabilities subject to compromise(1)~~

~~(7)~~

~~Balance as of September 30, 2020~~


(In millions)	Termination Benefits		Other		Total
Balance as of December 31, 2020(1)	$	0	$	0	$	0
Reclassified from liabilities subject to compromise	7		0		7
Charges incurred	13		4		17
Cash payments	(16)		0		(16)





Balance as of June 30, 2021	$	4	$	4	$	8

(1) As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company classified $7 million of restructuring charges as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of ~~September~~December 31, 2020, which were reinstated to accrued liabilities in the accompanying unaudited condensed consolidated balance sheet as of June 30, ~~2020.~~2021. See Note ~~16,~~17, "Liabilities Subject to ~~Compromise".~~Compromise."

Note 9—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, enhanced net operating loss ("NOL") carryback rules and an increase to the interest deduction limitation. The Company has considered the income tax provisions of the CARES Act in the tax benefit calculation for the three and nine months ended September 30, 2020. The Company continues to monitor and analyze the CARES Act along with global legislation issued in response to the COVID-19 pandemic.

Hertz Global

The effective tax rate is ~~14%~~22% and ~~30%~~18% for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The effective tax rate is ~~14%~~63% and ~~54%~~14% for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

Hertz Global recorded a tax benefit of ~~$36~~$46 million and ~~$232~~a tax provision of $33 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, respectively, compared to a tax ~~provision~~benefit of ~~$74~~$192 million and ~~$78~~$196 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, respectively. The increases in the effective tax ~~benefit~~rate and tax expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020 compared to 2019 is due to increased losses on~~2021 are driven by the changes in Hertz Global's ~~operations due to~~financial performance, changes in the ~~effect~~earnings of ~~COVID-19, primarily~~loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the ~~impact of valuation allowances on net deferred~~ tax assets for certain foreign and domestic jurisdictions. Additionally, Hertz Global no longer asserts permanent reinvestment of foreign earnings, due to the impact from COVID-19 as disclosed in Note 1, "Background." Hertz Global does not anticipate that the change in its assertion will have a material impact on its cash flows during the next twelve months, between October 1, 2020 and September 30, 2021.benefits associated with European restructuring initiatives.

~~Hertz~~

The effective tax rate is 14% and 30% for the three months ended September 30, 2020 and 2019, respectively. The effective tax rate is 14% and 53% for the nine months ended September 30, 2020 and 2019, respectively.

Hertz recorded a tax benefit of $36 million and $259 million for the three and nine months ended September 30, 2020, respectively, compared to a tax provision of $75 million and $79 million for the three months ended September 30, 2019, respectively. The tax benefit for the three and nine months ended September 30, 2020 compared to 2019 is due to increased losses on Hertz's operations due to the effect of COVID-19, primarily offset by the impact of valuation allowances on net deferred tax assets for certain foreign and domestic jurisdictions. Additionally, Hertz no longer asserts permanent reinvestment of foreign earnings, due to the impact from COVID-19

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Unaudited

Hertz

The effective tax rate is 90% and 19% for the three months ended June 30, 2021 and 2020, respectively. Hertz recorded a tax benefit of $46 million and $219 million for the three months ended June 30, 2021 and 2020, respectively. The decrease in the tax benefit in the three months ended June 30, 2021 compared to 2020 is driven by the changes in Hertz's financial performance, changes in earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

The effective tax rate is 15% for the six months ended June 30, 2021 and 2020, respectively. Hertz recorded a tax provision of $33 million for the six months ended June 30, 2021 compared to a tax benefit of $224 million for the six months ended June 30, 2020. The tax provision in the six months ended June 30, 2021 compared to 2020 is driven by the changes in Hertz's financial performance, changes in earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

Note 10— Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

Emergence from Bankruptcy

In connection with the Chapter 11 Emergence, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled. As of the Effective Date, there are 1,000,000,000 shares of reorganized Hertz Global common stock authorized for issuance. On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock as follows:

•277,119,438 shares purchased by the Plan Sponsors;

•14,133,024 shares issued, pro rata, to existing shareholders;

•127,362,114 shares issued pursuant to the Rights Offering; and

•52,487,886 shares distributed to the Backstop Parties.

As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding. The parties, including the Plan Sponsors who purchased reorganized Hertz Global common stock and preferred stock (collectively, the "Equity Commitment Parties"), the subscribers to the Rights Offering, and the Backstop Parties purchased an aggregate of (i) $4.7 billion of reorganized Hertz Global common stock and (ii) $1.5 billion (less a 2% upfront discount and stock issuance fees) of reorganized Hertz Global preferred stock as described below. The excess par value for the common stock shares issued by reorganized Hertz Global was recorded to additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global as of June 30, 2021.

Common Stock

Under reorganized Hertz Global's revised articles of incorporation, 1,000,000,000 shares of reorganized Hertz Global common stock have been authorized for issuance where each share has a par value of $0.01 and represents one vote on matters presented to the voting shareholders of reorganized Hertz Global. The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeds the par value was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global as of June 30, 2021. The reorganized Hertz Global common stock is not convertible and does not accrue dividends. Dividends, if any, are paid only upon a valid declaration by the board of directors of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to the Series A Preferred Stock, and applicable debt covenants.

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Unaudited

as disclosed in Note 1, "Background." Hertz does not anticipate that the change in its assertion will have a material impact on its cash flows during the next twelve months, between October 1, 2020 and September 30, 2021.

~~Note 10—Earnings (Loss) Per Share - Hertz Global~~

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

Rights Offering

In ~~June 2019, Hertz Global filed a prospectus supplement to its Registration Statement on Form S-3 declared effective by~~accordance with the ~~SEC on June 12, 2019 (the "Registration Statement") for a rights offering to raise gross proceeds~~Plan of Reorganization, approximately ~~$750 million and providing for the issuance~~35% of ~~up to an aggregate of 57,915,055 new shares of~~reorganized Hertz Global common stock ~~(the "Rights Offering"). Upon closing in July 2019,~~was offered pursuant to the Rights Offering for an aggregate purchase price of $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. The Rights Offering subscription was first made available to eligible existing Hertz Global shareholders ("Eligible Existing Shareholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed ~~resulting in~~and funded by Eligible Existing Shareholders, to certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility, pursuant to certain subscription procedures. The final expiration date for the Rights Offering occurred on June 15, 2021. Hertz Global ~~selling 57,915,055~~closed the offering upon emergence from the Chapter 11 Cases on June 30, 2021 with Eligible Existing Shareholders subscribing to purchase 127,362,114 shares of ~~its~~reorganized Hertz Global common stock for gross proceeds of ~~$750~~approximately $1.3 billion. The unsubscribed portion of the Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $361 million. The Backstop Parties were compensated a backstop fee of $164 million in reorganized Hertz Global common stock valued at $10.00 per share and presented within the Rights Offering totals within the Statement of Changes in Mezzanine Equity and Stockholders' Equity.

Public Warrants

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 89,049,029 Public Warrants. See Note 11, "Public Warrants – Hertz Global," for attributes of the Public Warrants, which are classified as a liability for financial reporting purposes.

Mezzanine Equity – Preferred Stock

In accordance with the revised articles of incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $0.01 per share, have been authorized for issuance. In connection with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of Series A preferred stock ("Series A Preferred Stock"), with an initial stated value of $1,000 per share, to Apollo, on behalf of one or more investment funds, separate accounts, and other entities owned, controlled, managed, and/or advised by it or its affiliates, for $1.5 billion, less a 2% upfront discount and stock issuance fees. The shares have 0 voting rights except that the affirmative vote or consent of the holders of a majority of the shares of Series A Preferred Stock will be necessary for effecting certain actions, including any amendment of the Certificate of Incorporation or Bylaws in a manner that adversely affects the rights, preferences and privileges of the New Preferred Stock; liquidation, dissolution or winding up of the reorganized Company or its business and affairs; the creation, authorization or issuance of any class or series of capital stock other than the reorganized Hertz Global common stock; issuance of additional shares of reorganized Hertz Global preferred stock; affiliate transactions, restricted payments; mergers or other business combinations; asset sales, indebtedness and investments. The holders of the shares are protected from certain events, including the dilutive issuance of additional preferred shares and securities convertible to equity of reorganized Hertz Global.

At the Company's discretion, it may redeem some or all of the outstanding shares of the Series A Preferred Stock for cash at the redemption price on the applicable redemption date (equal to the greater of (x) 100.0% of the then current accrued stated value of the shares being redeemed and (y) the amount necessary, if any, to result in a multiple on invested capital of 1.30x with respect to the shares being redeemed). As no one person or entity controls the voting stock of reorganized Hertz Global, a potential change-in-control action could be outside the Company's control and result in a non-compliance event, which could then result in a mandatory redemption of all outstanding shares of Series A Preferred Stock. Accordingly, the Series A Preferred Stock is classified as mezzanine equity at its redemption amount on the Company's unaudited condensed consolidated balance sheet as of June 30, 2021.

The Series A Preferred Stock shares have a liquidation preference that ranks senior to any other class or series of equity issued by reorganized Hertz Global. In the event of a voluntary or involuntary liquidation of Hertz Global, the holders of its Series A Preferred Stock would be entitled to receive a liquidation preference equal to the redemption price as of the date of such voluntary or involuntary liquidation. Pursuant to the certificate of designations for the

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Unaudited

Series A Preferred Stock, Hertz Global may redeem the Series A Preferred Stock in whole or in part at any time and from time to time, in cash, at a redemption price equal to the then-current accrued stated value of the Series A Preferred Stock being redeemed, subject to a multiple of invested capital floor price equal to 1.30 times the $1,000 per share liquidation preference.

Shares of the Series A Preferred Stock will accrue dividends payable in cash semi-annually in arrears at increasing dividend rates (with the first dividend paid on the six month anniversary of the Effective Date). Holders of the Series A Preferred Stock have certain dividend rights that provide priority over the dividend rights of holders of reorganized Hertz Global common stock. If not paid in cash when due, the dividend accrual will increase the value of the Series A Preferred Stock as well as future dividend obligations as a result of compounding. The Series A Preferred Shares do not participate in any additional dividends, including any dividends that may be paid on the common stock of reorganized Hertz Global. In general, the holders of the Series A Preferred Stock are entitled to an overall return of approximately 30% their investment.

Registration Status of Common Stock and Series A Preferred Stock

With the exception of shares of reorganized Hertz Global's common stock issued to the Backstop Parties, the direct investment commitment under the EPCA and the Rights Offering, the common stock and the Public Warrants issued by the reorganized Hertz Global pursuant to the Plan of Reorganization were issued under an exemption from the registration requirements of the Securities Act under the Bankruptcy Code. Shares of reorganized Hertz Global common stock issued to the Backstop Parties, the direct investment commitment under the EPCA, the Rights Offering and the Series A Preferred Stock were issued under Section 4(a)(2) of the Securities Act.

Open Market Sale Agreement

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into an open market sale agreement under which it ~~may~~could offer and sell from time to time shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $500 million ("ATM Program"). Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ATM Program for net proceeds of approximately $28 million, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheet as of ~~September~~December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled. Additionally, on the Effective Date, Hertz Global contributed the $28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz as of June 30, ~~2020.~~2021.

~~The following table sets forth the computation~~Computation of ~~basic and diluted~~Earnings (Loss) Per Share

Basic earnings (loss) per ~~share:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share data) 2020 2019 2020 2019
Numerator:
Net income (loss) attributable to Hertz Global $ (222) $ 169 $ (1,425) $ 61
Denominator:
Basic weighted-average shares outstanding (excluding the impact of the Rights Offering) 156 84 148 84
Rights Offering adjustment(1)
0 49 0 25
Basic weighted-average shares outstanding 156 133 148 109
Dilutive stock options, RSUs and PSUs 0 1 0 0
Diluted weighted-average shares outstanding 156 134 148 109
Antidilutive stock options, RSUs, PSUs and PSAs 2 1 2 1
Earnings (loss) per share:
Basic earnings (loss) per share $ (1.42) $ 1.26 $ (9.65) $ 0.56
Diluted earnings (loss) per share $ (1.42) $ 1.26 $ (9.65) $ 0.56

~~(1) Reflects~~share has been computed based upon the ~~impact~~weighted-average number of common shares outstanding. Diluted earnings (loss) per share has been computed based upon the ~~Rights Offering subscription period.~~weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive.

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Unaudited

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



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Denominator:


Basic weighted-average shares outstanding	160		144		158		143
Dilutive stock options, RSUs and PSUs	0		0		0		0
Diluted weighted-average shares outstanding	160		144		158		143
Antidilutive stock options, RSUs, PSUs and PSAs	1		2		1		2
Earnings (loss) per share:
Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)

Note 11—Public Warrants – Hertz Global

On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $13.80 per Public Warrant, subject to certain conditions. The Public Warrants allow the holders to purchase up to 18% of the aggregate number of reorganized Hertz Global common interests issued and outstanding as of the Effective Date. Each Public Warrant will entitle the holders to receive 1 share of reorganized Hertz Global common stock. The Public Warrants have a thirty-year term and are exercisable from the date of issuance until June 30, 2051, at which time any unexercised Public Warrants will expire, and the rights of the holders to purchase reorganized Hertz Global common stock will terminate. The exercise price of the Public Warrants is subject to adjustment from time to time upon any payment of cash dividends relating to reorganized Hertz Global's common stock and the occurrence of certain dilutive events as described in the Public Warrant Agreement. As of June 30, 2021, none of the Public Warrants were exercised.

The Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock. The Public Warrants trade on the over-the-counter market under the symbol HTZZW.

The Company accounts for the Public Warrants in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, under which the Public Warrants meet the definition of a freestanding financial instrument. Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions that are only applicable in the event of change of control (as defined by the Public Warrant Agreement). The Public Warrants are recorded at fair value in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2021. See Note 13, "Fair Value Measurements."

Note 12—Stock-Based Compensation

Under the Company's 2016 Omnibus Incentive Plan (the "Omnibus Plan"), the Company issued stock options, performance awards (shares and units), restricted stock and restricted stock units (collectively, "Equity Awards") to key executives, employees and non-management directors. On the Effective Date, in accordance with the Plan of Reorganization, all existing common stock and outstanding Equity Awards were cancelled without any distribution, and the Omnibus Plan deemed to be cancelled. As a result of the Equity Award cancellation, the Company recognized $10 million related to the unrecognized portion of share-based compensation in reorganization expense in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021. See Note 18, "Reorganization Items, Net."

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~Note 11—Employee Retirement Benefits~~

The Company sponsors several employee retirement plans for its U.S. employees. The Hertz Corporation Account Balance Defined Benefit Pension Plan (the "Hertz Retirement Plan") is a U.S. cash balance plan which was amended in 2014 to permanently discontinue future benefit accruals and participation under the plan for non-union employees. Additionally, the Company sponsors the Hertz Corporation Benefit Equalization Plan ("BEP") and the Hertz Corporation Supplemental Executive Retirement Plans (togetherConsistent with the ~~BEP,~~Disclosure Statement, the ~~"Supplemental Plans"), where benefit accruals~~reorganized Company anticipates the approval and ~~participation under~~implementation of a new management equity incentive plan (the “MEIP”). The MEIP will be effective in a reporting period subsequent to June 30, 2021, and as such, 0 compensation costs related to the ~~Supplemental Plans were discontinued by the Company effective December 31, 2014, although service continues to vest.~~

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," participants of the Supplemental Plans are no longer entitled to benefit payments and are considered general creditors of the Company. As such, the Company classified $24 million of its U.S. pension benefit obligation as liabilities subject to compromise in the accompanying unaudited consolidated balance sheet as of September 30, 2020. Also, amounts accrued for benefit payments under the Company's multiemployer pension plans of $4 millionMEIP have been ~~classified as liabilities subject to compromise in the accompanying unaudited consolidated balance sheet as of September 30, 2020.~~

~~The following table sets forth the net periodic pension cost of the Hertz Retirement Plan and the Supplemental Plans (collectively, the "U.S. Plan"), which is included in other (income) expense, net~~recorded in the accompanying unaudited condensed consolidated income statements of operations, excluding service cost which is included in direct vehicle and operating expense. Due to settlement accounting, the discount rate for the U.S. Plan has been revised from a weighted average rate of 3.1% as of ~~December 31, 2019 to 2.4% as~~June 30, 2021. As of ~~October 1, 2020.~~

U.S. Plan
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2020 2019 2020 2019
Interest cost $ 3 $ 5 $ 12 $ 16
Expected return on plan assets (5) (6) (15) (17)
Net amortizations 0 2 1 5
Settlement loss(1)
1 1 5 1
Net pension expense (benefit) $ (1) $ 2 $ 3 $ 5

~~(1) The Company incurred $4 million for~~ the ~~nine months ended September 30, 2020 in settlement charges primarily associated with a restructuring program that commenced in~~filing of this Quarterly Report on Form 10-Q, the ~~second quarter of 2020. See Note 8, "Restructuring."~~MEIP has not been established.

Note ~~12—~~13—Fair Value Measurements

~~Assets~~Under U.S. GAAP, entities are allowed to measure certain financial instruments and ~~Liabilities 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 or on a nonrecurring basis.

Fair Value ~~on a Recurring Basis~~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.

~~Cash Equivalents, Restricted Cash Equivalents and Investments~~Debt Obligations

The ~~Company’s cash equivalents~~fair value of the debt facilities is based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and ~~restricted cash equivalents primarily consist of investments~~average maturities (i.e. Level 2 inputs). For the new debt facilities entered into by the reorganized Company on the Effective Date as disclosed in ~~money market funds and time deposits. The Company determines~~Note 6, "Debt," such facilities were recently negotiated in arms-length transactions in active markets. As such, the fair value ~~of cash equivalents using a market approach based on quoted prices in active markets (i.e.,~~inputs are categorized as Level 1 ~~inputs).~~on U.S. GAAP's fair value hierarchy.

~~Investments~~



	June 30, 2021				December 31, 2020
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(1)	$	1,560	$	1,560	$	4,747	$	3,382
Vehicle Debt	7,069		7,075		6,087		6,021
Total	$	8,629	$	8,635	$	10,834	$	9,403

(1)Includes Non-Vehicle Debt included in ~~equity securities that are measured at fair value on a recurring basis consisted of marketable securities~~liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, ~~2019.~~2020. See Note ~~3, "Divestitures.~~6, "Debt." ~~for further 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 following table summarizes the ending balances of the Company's cash equivalents, restricted cash equivalents~~Assets and ~~investments:~~

September 30, 2020 December 31, 2019
(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Money market funds and time deposits $ 780 $ 0 $ 0 $ 780 $ 531 $ 0 $ 0 $ 531
Marketable securities 0 0 0 0 74 0 0 74
Liabilities Measured at Fair Value on a Recurring Basis

~~Debt Obligations~~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 ~~debt is estimated~~cash equivalents and restricted cash equivalents using a market approach based on quoted ~~market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities~~prices in active markets (i.e., Level 21 inputs).

As of September 30, 2020 As of December 31, 2019
(In millions) Nominal Unpaid Principal Balance
Aggregate Fair Value (1)
Nominal Unpaid Principal Balance Aggregate Fair Value
Non-Vehicle Debt(2)
$ 4,459 $ 2,859 $ 3,755 $ 3,840
Vehicle Debt 8,819 8,683 13,415 13,529
Total $ 13,278 $ 11,542 $ 17,170 $ 17,369

~~(1)~~The following table presents the Company's ~~The decrease in the aggregate~~cash equivalents and restricted cash equivalents that are measured at fair value ofon a recurring basis and are categorized using the ~~Company's debt is due to the impact from COVID-19 and the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background."~~fair value hierarchy:



	June 30, 2021								December 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total


Cash equivalents and restricted cash equivalents	$	324	$	0	$	0	$	324	$	723	$	0	$	0	$	723

Public Warrants

~~(2)Includes Non-Vehicle Debt included in~~Under the Plan of Reorganization, reorganized Hertz Global issued Public Warrants, which are classified as liabilities ~~subject to compromise~~at fair value in the accompanying unaudited condensed consolidated balance sheet as of ~~September~~June 30, ~~2020.~~2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ("ASC 480"). See Note ~~6, "Debt.~~11, "Public Warrants – Hertz Global," for further details. Upon issuance on the Effective Date, the initial fair value of the Public Warrants was $800 million which was computed using the Black-Scholes option pricing model using Level 2 inputs. As of June 30, 2021, none of the Public Warrants were exercised.

The following table presents the key inputs used in the fair value of the Public Warrants at issuance on the Effective Date, June 30, 2021:



	Inputs


Risk-free interest rate	2.1		%
Expected term	30 years
Expected volatility	57.5		%
Exercise price	$	13.80
Asset price	$	10.02

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

~~In the second quarter of~~Donlen Assets

At December 31, 2020 as ~~disclosed in Note 5, Goodwill and Intangible Assets, Net,~~a result of the ~~Company recorded impairment charges for certain technology-related intangible~~then impending Donlen Sale, the associated assets and ~~other assets.~~liabilities were classified as assets held for sale and liabilities held for sale, respectively, in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020 and were recorded at the lower of carrying value or fair value less any costs to sell. The Company completed the Donlen Sale on March 30, 2021. See Note 3, "Divestitures," for additional information.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note ~~13—~~14—Contingencies and Off-Balance Sheet Commitments

Legal Proceedings

~~Legal Proceedings~~

~~Self-insured~~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 and~~reported. The related liabilities are recorded on an undiscounted ~~basis. Reserve requirements~~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 ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company's liability recorded for self-insured liabilities is ~~$481~~$459 million and ~~$553~~$488 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.

~~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~~

~~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 legal proceedings to which the Company was and/or is a party as of September 30, 2020 or the period after September 30, 2020, but before the filing of this Quarterly Report on Form 10-Q.

~~Governmental Investigations~~ - The Company previously identified certain activities in Brazil that raised issues under the Foreign Corrupt Practices Act (the "FCPA") and other federal and local laws, which the Company self-reported to appropriate government entities. The matters associated with the FCPA and other federal matters were previously resolved without further action by the applicable U.S. government entities. The Company entered into a leniency agreement in August 2020 with the Brazilian authorities for a monetary sanction against a Hertz non-Debtor subsidiary, and the matters under local Brazilian laws are now closed.

~~In re~~ Hertz Global ~~Holdings, Inc. Securities Litigation~~ - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Old Hertz Holdings (as defined in the Company's 2019 Form 10-K) and certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleged that Old Hertz Holdings made material misrepresentations and/or omissions of material fact in certain of its public disclosures in violation of Section 10(b) and 20(a) of 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 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 plaintiffs 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, which was supplemented by reference to the Company’s subsequently filed litigation against former executives (discussed below). 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 as to the district court’s latest denial 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 since the motion was not timely filed and the appeal as to the Company remains stayed.

The ~~Company has established reserves~~effective tax rate is 22% and 18% for ~~matters where~~ the ~~Company believes that losses are probable~~three months ended June 30, 2021 and ~~can be reasonably estimated. Other than~~2020, respectively. The effective tax rate is 63% and 14% for the aggregate reserve established for claims for self-insured liabilities, none of those reserves are material. For matters, including certain of those 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 uncertaintiessix months ended June 30, 2021 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, including those discussed above, 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 accompanying consolidated financial condition, results of operations or cash flows in any particular reporting period.2020, respectively.

~~Other Proceedings~~Hertz Global recorded a tax benefit of $46 million and a tax provision of $33 million for the three and six months ended June 30, 2021, respectively, compared to a tax benefit of $192 million and $196 million for the three and six months ended June 30, 2020, respectively. The increases in the effective tax rate and tax expense for the three and six months ended June 30, 2021 are driven by the changes in Hertz Global's financial performance, changes in the earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

~~Litigation Against Former Executives~~ ~~- The Company filed litigation in federal court in New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against~~

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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

~~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 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 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 is now scheduled for the end of November 2020. 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.

~~Indemnification Obligations~~The effective tax rate is 90% and 19% for the three months ended June 30, 2021 and 2020, respectively. Hertz recorded a tax benefit of $46 million and $219 million for the three months ended June 30, 2021 and 2020, respectively. The decrease in the tax benefit in the three months ended June 30, 2021 compared to 2020 is driven by the changes in Hertz's financial performance, changes in earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

InThe effective tax rate is 15% for the ~~ordinary course~~six months ended June 30, 2021 and 2020, respectively. Hertz recorded a tax provision of ~~business,~~$33 million for the ~~Company has executed contracts involving indemnification obligations customary~~six months ended June 30, 2021 compared to a tax benefit of $224 million for the six months ended June 30, 2020. The tax provision in the ~~relevant industry~~six months ended June 30, 2021 compared to 2020 is driven by the changes in Hertz's financial performance, changes in earnings of loss jurisdictions for which no tax benefit can be recognized and ~~indemnifications specific to a transaction such as~~non-deductible reorganization costs, partially offset by 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 coststax benefits 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.European restructuring initiatives.

Note ~~14—Related Party Transactions~~10— Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

~~Agreements with the Icahn Group~~Emergence from Bankruptcy

In connection with the ~~normal course~~Chapter 11 Emergence, all of ~~business,~~Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled. As of the Company purchases goods and services and leases property from entities controlled by Carl C. Icahn and his affiliates, including The Pep Boys - Manny, Moe & Jack (collectively, the "Icahn Group"). In May 2020, the Icahn Group fully divested all ownedEffective Date, there are 1,000,000,000 shares of reorganized Hertz Global common stock ~~(the "Icahn Divestiture"). During~~authorized for issuance. On the ~~five months ended May 31, 2020,~~Effective Date, in accordance with the ~~Company~~Plan of Reorganization, reorganized Hertz Global issued common stock as follows:

•277,119,438 shares purchased ~~approximately $23 million worth of goods~~by the Plan Sponsors;

•14,133,024 shares issued, pro rata, to existing shareholders;

•127,362,114 shares issued pursuant to the Rights Offering; and ~~services from these related parties. During~~

•52,487,886 shares distributed to the ~~three months and nine months ended September 30, 2019, the Company purchased approximately $15 million and $39 million, respectively, worth of goods and services from these related parties.~~Backstop Parties.

As ~~a result~~ of the ~~Icahn Divestiture,~~Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding. The parties, including the ~~Icahn Group is no longer a related party of~~Plan Sponsors who purchased reorganized Hertz Global common stock and preferred stock (collectively, the ~~Company. Subsequent~~"Equity Commitment Parties"), the subscribers to the ~~Icahn Divestiture, there continue to be arms-length transactions between the Company~~Rights Offering, and the ~~Icahn Group.~~Backstop Parties purchased an aggregate of (i) $4.7 billion of reorganized Hertz Global common stock and (ii) $1.5 billion (less a 2% upfront discount and stock issuance fees) of reorganized Hertz Global preferred stock as described below. The excess par value for the common stock shares issued by reorganized Hertz Global was recorded to additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global as of June 30, 2021.

Common Stock

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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

~~Transactions and Agreements between Hertz Holdings and Hertz~~Rights Offering

In accordance with the Plan of Reorganization, approximately 35% of reorganized Hertz Global common stock was offered pursuant to the Rights Offering for an aggregate purchase price of $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. The Rights Offering subscription was first made available to eligible existing Hertz Global shareholders ("Eligible Existing Shareholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed and funded by Eligible Existing Shareholders, to certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility, pursuant to certain subscription procedures. The final expiration date for the Rights Offering occurred on June ~~2019,~~15, 2021. Hertz ~~entered into~~Global closed the offering upon emergence from the Chapter 11 Cases on June 30, 2021 with Eligible Existing Shareholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $1.3 billion. The unsubscribed portion of the Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $361 million. The Backstop Parties were compensated a ~~master loan agreement~~backstop fee of $164 million in reorganized Hertz Global common stock valued at $10.00 per share and presented within the Rights Offering totals within the Statement of Changes in Mezzanine Equity and Stockholders' Equity.

Public Warrants

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz ~~Holdings~~Global issued 89,049,029 Public Warrants. See Note 11, "Public Warrants – Hertz Global," for attributes of the Public Warrants, which are classified as a ~~facility size~~liability for financial reporting purposes.

Mezzanine Equity – Preferred Stock

In accordance with the revised articles of ~~$425 million~~incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $0.01 per share, have been authorized for issuance. In connection with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of Series A preferred stock ("Series A Preferred Stock"), with an ~~expiration~~initial stated value of $1,000 per share, to Apollo, on behalf of one or more investment funds, separate accounts, and other entities owned, controlled, managed, and/or advised by it or its affiliates, for $1.5 billion, less a 2% upfront discount and stock issuance fees. The shares have 0 voting rights except that the affirmative vote or consent of the holders of a majority of the shares of Series A Preferred Stock will be necessary for effecting certain actions, including any amendment of the Certificate of Incorporation or Bylaws in ~~June 2020 (the "2019 Master Loan").~~a manner that adversely affects the rights, preferences and privileges of the New Preferred Stock; liquidation, dissolution or winding up of the reorganized Company or its business and affairs; the creation, authorization or issuance of any class or series of capital stock other than the reorganized Hertz Global common stock; issuance of additional shares of reorganized Hertz Global preferred stock; affiliate transactions, restricted payments; mergers or other business combinations; asset sales, indebtedness and investments. The ~~interest rate is based~~holders of the shares are protected from certain events, including the dilutive issuance of additional preferred shares and securities convertible to equity of reorganized Hertz Global.

At the Company's discretion, it may redeem some or all of the outstanding shares of the Series A Preferred Stock for cash at the redemption price on the ~~U.S. Dollar LIBOR rate plus a margin. As~~applicable redemption date (equal to the greater of ~~December 31, 2019,~~(x) 100.0% of the then current accrued stated value of the shares being redeemed and (y) the amount necessary, if any, to result in a multiple on invested capital of 1.30x with respect to the shares being redeemed). As no one person or entity controls the voting stock of reorganized Hertz Global, a potential change-in-control action could be outside the Company's control and result in a non-compliance event, which could then result in a mandatory redemption of all outstanding ~~under~~shares of Series A Preferred Stock. Accordingly, the ~~2019 Master Loan was $129 million, representing advances and any accrued but unpaid interest. Additionally, Hertz had a loan due to an affiliate in~~Series A Preferred Stock is classified as mezzanine equity at its redemption amount on the ~~amount of $65 million as of December 31, 2019 which represents a tax-related liability to Hertz Holdings. The net impact of the above amounts are included in stockholder's equity in the accompanying~~Company's unaudited condensed consolidated balance sheet ~~of Hertz~~ as of ~~December 31, 2019.~~

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, which is included in the accompanying unaudited condensed consolidated statement of operations for Hertz for the nine months ended SeptemberJune 30, 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 sheet of Hertz as of September 30, 2020. See Note 16, "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 (the "New Loan"). The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. As of September 30, 2020, there is $1 million outstanding under the New Loan representing additional charges incurred in the third quarter of 2020 associated with the ATM Program, as disclosed in Note 10, "Earnings (Loss) Per Share - Hertz Global," paid by Hertz on behalf of Hertz Holdings.

~~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, the option to acquire certain vehicles from Hertz at rates aligned with the rates at which Hertz sells vehicles to third parties. As disclosed above, due to the Icahn Divestiture, the Icahn Group is no longer a related party of the Company. 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 ("Icahn Locations"), 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 the Icahn Group. During the three and nine months ended September 30, 2020, 767 distributed $55 million to AEPC, and there were no cash contributions from AEPC to 767, except for certain services. During the three and nine months ended September 30, 2019, AEPC contributed $5 million and $50 million, respectively, to 767 along with certain services.2021.

The ~~Company is~~Series A Preferred Stock shares have a liquidation preference that ranks senior to any other class or series of equity issued by reorganized Hertz Global. In the event of a voluntary or involuntary liquidation of Hertz Global, the holders of its Series A Preferred Stock would be entitled to ~~25%~~receive a liquidation preference equal to the redemption price as of the ~~profit from~~date of such voluntary or involuntary liquidation. Pursuant to the ~~rental~~certificate 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 is the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impact 767's economic performance and the Company's obligation to absorb 25% of 767's gains/losses. Accordingly, 767 is consolidated by the Company as a VIE.

~~In October 2019, the 767 Lease Agreement was amended such that, among other changes, 767 vehicles will be available~~designations for ~~rent from Hertz locations that are opened in replacement of closed Icahn Locations, and~~ the ~~767~~

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THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~vehicles~~Series A Preferred Stock, Hertz Global may ~~be available for rent~~redeem the Series A Preferred Stock in whole or in part at any time and from time to ~~traditional off airport customers~~time, in ~~addition~~cash, at a redemption price equal to ~~TNC drivers, when certain conditions apply.~~the then-current accrued stated value of the Series A Preferred Stock being redeemed, subject to a multiple of invested capital floor price equal to 1.30 times the $1,000 per share liquidation preference.

~~Note 15—Segment Information~~

~~The Company’s chief operating decision maker assesses performance and allocates resources based upon~~Shares of the ~~financial information for~~Series A Preferred Stock will accrue dividends payable in cash semi-annually in arrears at increasing dividend rates (with the ~~Company’s operating segments. The Company aggregates certain of its operating segments into its reportable segments. The Company has identified 3 reportable segments, which are organized based~~first dividend paid on the ~~products and services provided by its operating segments and~~six month anniversary of the ~~geographic areas~~Effective Date). Holders of the Series A Preferred Stock have certain dividend rights that provide priority over the dividend rights of holders of reorganized Hertz Global common stock. If not paid in ~~which its operating segments conduct business,~~cash when due, the dividend accrual will increase the value of the Series A Preferred Stock as ~~follows:~~well as future dividend obligations as a result of compounding. The Series A Preferred Shares do not participate in any additional dividends, including any dividends that may be paid on the common stock of reorganized Hertz Global. In general, the holders of the Series A Preferred Stock are entitled to an overall return of approximately 30% their investment.

•Registration Status of Common Stock and Series A Preferred StockU.S. Rental Car ("U.S. RAC") - rental of vehicles (i.e., cars, crossovers, vans and light trucks), as well as sales of value-added services, in the U.S. and consists of the Company's U.S. operating segment;

•~~International Rental Car ("International RAC") - rental~~With the exception of shares of reorganized Hertz Global's common stock issued to the Backstop Parties, the direct investment commitment under the EPCA and ~~leasing~~the Rights Offering, the common stock and the Public Warrants issued by the reorganized Hertz Global pursuant to the Plan of ~~vehicles (i.e., cars, vans, crossovers and light trucks), as well as sales of value-added services, internationally and consists~~Reorganization were issued under an exemption from the registration requirements of the ~~Company's Europe~~Securities Act under the Bankruptcy Code. Shares of reorganized Hertz Global common stock issued to the Backstop Parties, the direct investment commitment under the EPCA, the Rights Offering 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;the Series A Preferred Stock were issued under Section 4(a)(2) of the Securities Act.

•All Other Operations - primarily consists of the Company's Donlen business, which provides vehicle leasing and fleet management services, together with other business activities which represent less than 1% of revenues and expenses of the segment.Open Market Sale Agreement

In ~~addition~~June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the ~~above reportable segments,~~Registration Statement, Hertz Global entered into an open market sale agreement under which it could offer and sell from time to time shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $500 million ("ATM Program"). Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ~~Company~~ATM Program for net proceeds of approximately $28 million, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled. Additionally, on the Effective Date, Hertz Global contributed the $28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz as of June 30, 2021.

Computation of Earnings (Loss) Per Share

Basic earnings (loss) per share 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 reconcilebeen computed based upon the ~~reportable segments to~~weighted-average number of common shares outstanding. Diluted earnings (loss) per share has been computed based upon the ~~Company's total amounts.~~weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive.

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~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Denominator:


Basic weighted-average shares outstanding	160		144		158		143
Dilutive stock options, RSUs and PSUs	0		0		0		0
Diluted weighted-average shares outstanding	160		144		158		143
Antidilutive stock options, RSUs, PSUs and PSAs	1		2		1		2
Earnings (loss) per share:
Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)

Note 11—Public Warrants – Hertz Global

The ~~following tables provide significant~~Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock. The Public Warrants trade on the over-the-counter market under the symbol HTZZW.

Note 12—Stock-Based Compensation

Under the Company's 2016 Omnibus Incentive Plan (the "Omnibus Plan"), the Company issued stock options, performance awards (shares and units), restricted stock and restricted stock units (collectively, "Equity Awards") to key executives, employees and non-management directors. On the Effective Date, in accordance with the Plan of Reorganization, all existing common stock and outstanding Equity Awards were cancelled without any distribution, and the Omnibus Plan deemed to be cancelled. As a result of the Equity Award cancellation, the Company recognized $10 million related to the unrecognized portion of share-based compensation in reorganization expense in the accompanying unaudited condensed consolidated statements of operations for the three 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
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Revenues
U.S. Rental Car $ 866 $ 1,962 $ 2,780 $ 5,266
International Rental Car 253 702 755 1,695
All Other Operations 149 172 488 493
Total Hertz Global and Hertz $ 1,268 $ 2,836 $ 4,023 $ 7,454
Depreciation of revenue earning vehicles and lease charges
U.S. Rental Car $ 182 $ 420 $ 1,054 $ 1,217
International Rental Car 59 126 228 329
All Other Operations 106 121 352 346
Total Hertz Global and Hertz $ 347 $ 667 $ 1,634 $ 1,892
Adjusted EBITDA
U.S. Rental Car $ (10) $ 269 $ (678) $ 432
International Rental Car (35) 115 (207) 157
All Other Operations 24 24 71 70
Corporate (5) (16) (41) (64)
Total Hertz Global and Hertz $ (26) $ 392 $ (855) $ 595

(In millions) September 30, 2020 December 31, 2019
Total assets
U.S. Rental Car $ 12,066 $ 16,459
International Rental Car 3,355 4,563
All Other Operations 1,853 2,115
Corporate 1,483 1,490
Total Hertz Global(1)
18,757 24,627
Corporate - Hertz(2)
(28) 0
Total Hertz(1)
$ 18,729 $ 24,627

~~(1) The consolidated total assets of Hertz Global and Hertz as of September~~six months ended June 30, ~~2020 and December 31, 2019 include total assets of VIEs of $705 million and $1.3 billion, respectively, which can only be used to settle obligations of the VIEs.~~2021. See ~~"Special Purpose Entities" in~~ Note ~~6, "Debt,~~18, "Reorganization Items, Net." ~~and "767 Auto Leasing LLC" in Note 14, "Related Party Transactions," for further information.~~

~~(2) Excludes net proceeds from the ATM Program of $28 million as disclosed in Note 10, "Earnings (Loss) Per Share - Hertz Global."~~

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~~(DEBTORS-IN-POSSESSION)~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Consistent with the Disclosure Statement, the reorganized Company anticipates the approval and implementation of a new management equity incentive plan (the “MEIP”). The MEIP will be effective in a reporting period subsequent to June 30, 2021, and as such, 0 compensation costs related to the MEIP have been recorded in the accompanying unaudited condensed consolidated income statements as of June 30, 2021. As of the filing of this Quarterly Report on Form 10-Q, the MEIP has not been established.

Note 13—Fair Value Measurements

Under U.S. GAAP, entities are allowed to measure certain financial instruments and 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 or on a nonrecurring basis.

Fair Value Disclosures

Debt Obligations

The fair value of the debt facilities is 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). For the new debt facilities entered into by the reorganized Company on the Effective Date as disclosed in Note 6, "Debt," such facilities were recently negotiated in arms-length transactions in active markets. As such, the fair value inputs are categorized as Level 1 on U.S. GAAP's fair value hierarchy.



	June 30, 2021				December 31, 2020
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(1)	$	1,560	$	1,560	$	4,747	$	3,382
Vehicle Debt	7,069		7,075		6,087		6,021
Total	$	8,629	$	8,635	$	10,834	$	9,403

(1)Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020. See Note 6, "Debt."

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:~~Assets and Liabilities Measured at Fair Value on a Recurring Basis

Cash Equivalents and Restricted Cash Equivalents

The following table presents the Company's cash equivalents and restricted cash equivalents that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:



	June 30, 2021								December 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total


Cash equivalents and restricted cash equivalents	$	324	$	0	$	0	$	324	$	723	$	0	$	0	$	723

Public Warrants

Under the Plan of Reorganization, reorganized Hertz Global issued Public Warrants, which are classified as liabilities at fair value in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ("ASC 480"). See Note 11, "Public Warrants – Hertz Global," for further details. Upon issuance on the Effective Date, the initial fair value of the Public Warrants was $800 million which was computed using the Black-Scholes option pricing model using Level 2 inputs. As of June 30, 2021, none of the Public Warrants were exercised.

The following table presents the key inputs used in the fair value of the Public Warrants at issuance on the Effective Date, June 30, 2021:



	Inputs


Risk-free interest rate	2.1		%
Expected term	30 years
Expected volatility	57.5		%
Exercise price	$	13.80
Asset price	$	10.02

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Donlen Assets

At December 31, 2020 as a result of the then impending Donlen Sale, the associated assets and liabilities were classified as assets held for sale and liabilities held for sale, respectively, in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020 and were recorded at the lower of carrying value or fair value less any costs to sell. The Company completed the Donlen Sale on March 30, 2021. See Note 3, "Divestitures," for additional information.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note 14—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 June 30, 2021 and December 31, 2020, the Company's liability recorded for self-insured liabilities is $459 million and $488 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.

Hertz Global

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Adjusted EBITDA:
U.S. Rental Car $ (10) $ 269 $ (678) $ 432
International Rental Car (35) 115 (207) 157
All Other Operations 24 24 71 70
Total reportable segments (21) 408 (814) 659
Corporate(1)
(5) (16) (41) (64)
Total Hertz Global (26) 392 (855) 595
Adjustments:
Non-vehicle depreciation and amortization (58) (51) (168) (151)
Non-vehicle debt interest, net (17) (70) (118) (214)
Vehicle debt-related charges(2)
(13) (10) (37) (29)
Restructuring and restructuring related charges(3)
(7) (1) (54) (11)
Technology-related intangible and other asset impairments(4)
0 0 (193) 0
Information technology and finance transformation costs(5)
(8) (17) (34) (77)
Reorganization items, net(6)
(78) 0 (101) 0
Pre-reorganization charges and non-debtor financing charges(7)
(44) 0 (89) 0
Other items(8)
(8) 4 (15) 30
Income (loss) before income taxes $ (259) $ 247 $ (1,664) $ 143
The effective tax rate is 22% and 18% for the three months ended June 30, 2021 and 2020, respectively. The effective tax rate is 63% and 14% for the six months ended June 30, 2021 and 2020, respectively.

Hertz Global recorded a tax benefit of $46 million and a tax provision of $33 million for the three and six months ended June 30, 2021, respectively, compared to a tax benefit of $192 million and $196 million for the three and six months ended June 30, 2020, respectively. The increases in the effective tax rate and tax expense for the three and six months ended June 30, 2021 are driven by the changes in Hertz Global's financial performance, changes in the earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Hertz

Note 10— Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

Emergence from Bankruptcy

•277,119,438 shares purchased by the Plan Sponsors;

•14,133,024 shares issued, pro rata, to existing shareholders;

•127,362,114 shares issued pursuant to the Rights Offering; and

•52,487,886 shares distributed to the Backstop Parties.

Common Stock

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Rights Offering

In accordance with the Plan of Reorganization, approximately 35% of reorganized Hertz Global common stock was offered pursuant to the Rights Offering for an aggregate purchase price of $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. The Rights Offering subscription was first made available to eligible existing Hertz Global shareholders ("Eligible Existing Shareholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed and funded by Eligible Existing Shareholders, to certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility, pursuant to certain subscription procedures. The final expiration date for the Rights Offering occurred on June 15, 2021. Hertz Global closed the offering upon emergence from the Chapter 11 Cases on June 30, 2021 with Eligible Existing Shareholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $1.3 billion. The unsubscribed portion of the Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $361 million. The Backstop Parties were compensated a backstop fee of $164 million in reorganized Hertz Global common stock valued at $10.00 per share and presented within the Rights Offering totals within the Statement of Changes in Mezzanine Equity and Stockholders' Equity.

Public Warrants

Mezzanine Equity – Preferred Stock

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Registration Status of Common Stock and Series A Preferred Stock

Open Market Sale Agreement

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into an open market sale agreement under which it could offer and sell from time to time shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $500 million ("ATM Program"). Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ATM Program for net proceeds of approximately $28 million, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled. Additionally, on the Effective Date, Hertz Global contributed the $28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz as of June 30, 2021.

Computation of Earnings (Loss) Per Share

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Denominator:


Basic weighted-average shares outstanding	160		144		158		143
Dilutive stock options, RSUs and PSUs	0		0		0		0
Diluted weighted-average shares outstanding	160		144		158		143
Antidilutive stock options, RSUs, PSUs and PSAs	1		2		1		2
Earnings (loss) per share:
Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)

Note 11—Public Warrants – Hertz Global

Note 12—Stock-Based Compensation

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note 13—Fair Value Measurements

Fair Value Disclosures

Debt Obligations



	June 30, 2021				December 31, 2020
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(1)	$	1,560	$	1,560	$	4,747	$	3,382
Vehicle Debt	7,069		7,075		6,087		6,021
Total	$	8,629	$	8,635	$	10,834	$	9,403

(1)Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020. See Note 6, "Debt."

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Cash Equivalents and Restricted Cash Equivalents

The following table presents the Company's cash equivalents and restricted cash equivalents that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:



	June 30, 2021								December 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total


Cash equivalents and restricted cash equivalents	$	324	$	0	$	0	$	324	$	723	$	0	$	0	$	723

Public Warrants

The following table presents the key inputs used in the fair value of the Public Warrants at issuance on the Effective Date, June 30, 2021:



	Inputs


Risk-free interest rate	2.1		%
Expected term	30 years
Expected volatility	57.5		%
Exercise price	$	13.80
Asset price	$	10.02

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Donlen Assets

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note 14—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 June 30, 2021 and December 31, 2020, the Company's liability recorded for self-insured liabilities is $459 million and $488 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, former employees and governmental investigations. The Company has summarized below the most significant legal proceeding to which the Company was a party during the period ending June 30, 2021 or the period after June 30, 2021, but before the filing of this Quarterly Report on Form 10-Q.

In re Hertz Global Holdings, Inc. Securities Litigation - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Old Hertz Holdings (as defined in the Company's 2020 Form 10-K) and certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleged that Old Hertz Holdings made material misrepresentations and/or omissions of material fact in certain of its public disclosures in violation of Section 10(b) and 20(a) of 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 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 plaintiffs 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, which was supplemented by reference to the Company’s subsequently filed litigation against former executives (disclosed below). 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

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12, 2021, the Bankruptcy Court approved the tentative settlement and the terms of the settlement have now been fully implemented. This matter is now closed.

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, (2) 5.500% Unsecured Notes due 2024, (3) 7.125% Unsecured Notes due 2026, and (4) 6.000% Unsecured Notes due 2028 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 Services Corporation, Hertz Local Edition Corp., Hertz Local Edition Transporting, Inc., Hertz System, Inc., Hertz Technologies, Inc., Hertz Transporting, Inc., Rental Car Group Company, LLC, Smartz Vehicle Rental Corporation, Thrifty Car Sales, Inc., Thrifty, LLC, Thrifty 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 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 alternative are entitled to payment post-petition interest at the applicable contractual rate that 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 answer to the Complaint within 30 days. On August 2, 2021, the Defendants filed a motion to dismiss both counts for declaratory judgment. 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.

Additionally, some creditors in the Chapter 11 Cases may assert that the Company owes additional interest and, in certain cases, additional make wholes 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 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 this litigation.

The Company maintains an internal compliance program through which it from time to time identifies 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, 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

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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 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. In 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. Discovery and depositions are continuing in the New Jersey action. The Florida action is now closed. 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.

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.

Note 15—Related Party Transactions

Transactions and Agreements between Hertz Holdings and Hertz

In June 2019, Hertz entered into a master loan agreement 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 sheet of Hertz as of December 31, 2020. On the Effective Date, the $65 million tax-related liability from Hertz to Hertz Holdings was reinstated and classified as due to affiliate in the accompanying consolidated balance sheet of Hertz as of June 30, 2021. See Note 17, "Liabilities Subject to Compromise."

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In May 2021, upon expiration of the New Loan, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2022 (the "2021 Master Loan"), where amounts outstanding under the New Loan were transferred to the 2021 Master Loan. The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. As of December 31, 2020, there was $1 million outstanding under the 2021 Master Loan representing advances and any accrued but unpaid interest. On June 30, 2021, in connection with the Chapter 11 Emergence, the ATM Program contribution from Hertz Global, as discussed in Note 10, Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global, was used to settle amounts outstanding under the New Loan.

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 half of 2020 until all owned shares of Hertz Global common stock were divested in 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. During the three and six months ended June 30, 2021, 767 distributed $5 million and $15 million, respectively, to AEPC along with the return of certain vehicles, and there were no cash contributions from AEPC to 767. There were 0 cash distributions or contributions to or from AEPC during the three and six months ended June 30, 2020, except for certain services. The parties have agreed that the 767 Lease Agreement will terminate effective October 31, 2021, and that in connection with the wind-down Hertz will purchase certain of the 767 leased vehicles for continued rental as part of Hertz’s TNC rental fleet.

The Company is entitled to 25% 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 is the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impact 767's economic performance and the Company's obligation to absorb 25% of 767's gains/losses. Accordingly, 767 is consolidated by the Company as a VIE.

Note 16—Segment Information

The Company’s CODM assesses performance and allocates resources based upon the financial information for the Company’s operating segments. The Company aggregates certain of its operating segments into its reportable segments. In the second quarter of 2021, in connection with the Chapter 11 Emergence as disclosed in Note 1, "Background," and changes in how the Company's CODM regularly reviews operating results and allocates resources, the Company revised its reportable segments to include Canada, Latin America and the Caribbean in its Americas Rental Car ("Americas RAC") reportable segment, which were previously included in its International Rental Car ("International RAC") reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. The Company has identified 2 reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows.

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•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 the Caribbean;

•International RAC – rental and leasing of vehicles (cars, vans, crossovers and light trucks), as well as sales of value-added services, internationally and consists primarily of the Company's Europe operating segment 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; and

In addition to the above reportable segments, 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.

The following tables provide significant statements 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 June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Revenues
Americas RAC	$	1,643	$	543	$	2,610	$	1,964
International RAC	230		125		415		452
Total reportable segments	1,873		668		3,025		2,416
All other operations(1)	0		164		136		339
Total Hertz Global and Hertz	$	1,873	$	832	$	3,161	$	2,755
Depreciation of revenue earning vehicles and lease charges
Americas RAC	$	80	$	419	$	290	$	893
International RAC	36		70		69		147
Total reportable segments	116		489		359		1,040
All other operations(1)(2)	0		120		0		245
Total Hertz Global and Hertz	$	116	$	609	$	359	$	1,285
Adjusted EBITDA
Americas RAC	$	664	$	(485)	$	690	$	(690)
International RAC	(1)		(112)		(9)		(150)
Total reportable segments	663		(597)		681		(840)
All other operations(1)	0		23		13		48
Corporate	(24)		(13)		(52)		(38)
Total Hertz Global and Hertz	$	639	$	(587)	$	642	$	(830)

(1) Substantially 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 during the six months ended June 30, 2021, 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."

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(In millions)	June 30, 2021		December 31, 2020
Total assets
Americas RAC	$	13,178	$	11,325
International RAC	3,128		2,673
Total reportable segments	16,306		13,998
All other operations(1)	0		1,818
Corporate	2,701		1,092
Total Hertz Global(2)	19,007		16,908
Corporate - Hertz(3)	0		(28)
Total Hertz(2)	$	19,007	$	16,880

(1) Substantially 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 June 30, 2021 and December 31, 2020 include total assets of VIEs of $808 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. See "Special Purpose Entities" in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 15, "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 December 31, 2020.

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

Hertz Global



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Adjusted EBITDA:
Americas RAC	$	664	$	(485)	$	690	$	(690)
International RAC	(1)		(112)		(9)		(150)
Total reportable segments	663		(597)		681		(840)
All other operations(1)	0		23		13		48
Corporate(2)	(24)		(13)		(52)		(38)
Total Hertz Global	639		(587)		642		(830)
Adjustments:
Non-vehicle depreciation and amortization	(50)		(57)		(104)		(110)
Non-vehicle debt interest, net(3)	(91)		(44)		(135)		(101)
Vehicle debt-related charges(4)	(26)		(15)		(54)		(24)

Restructuring and restructuring related charges(5)	(37)		(41)		(50)		(47)
Technology-related intangible and other asset impairments(6)	0		(193)		0		(193)
Information technology and finance transformation costs(7)	(4)		(8)		(10)		(25)
Reorganization items, net(8)	(633)		(23)		(677)		(23)
Pre-reorganization charges and non-debtor financing charges(9)	(17)		(45)		(40)		(45)
Gain from the Donlen Sale(10)	8		0		400		0
Other items(11)	(4)		(31)		80		(7)
Income (loss) before income taxes	$	(215)	$	(1,044)	$	52	$	(1,405)

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Hertz

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Adjusted EBITDA:
U.S. Rental Car $ (10) $ 269 $ (678) $ 432
International Rental Car (35) 115 (207) 157
All Other Operations 24 24 71 70
Total reportable segments (21) 408 (814) 659
Corporate(1)
(5) (16) (41) (64)
Total Hertz Global (26) 392 (855) 595
Adjustments:
Non-vehicle depreciation and amortization (58) (51) (168) (151)
Non-vehicle debt interest, net (17) (68) (116) (209)
Vehicle debt-related charges(2)
(13) (10) (37) (29)
Restructuring and restructuring related charges(3)
(7) (1) (54) (11)
Technology-related intangible and other asset impairments(4)
0 0 (193) 0
Write-off of intercompany loan(9)
0 0 (133) 0
Information technology and finance transformation costs(5)
(8) (17) (34) (77)
Reorganization items, net(6)
(78) 0 (101) 0
Pre-reorganization charges and non-debtor financing charges(7)
(44) 0 (89) 0
Other items(8)
(8) 4 (15) 30
Income (loss) before income taxes $ (259) $ 249 $ (1,795) $ 148



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Adjusted EBITDA:
Americas RAC	$	664	$	(485)	$	690	$	(690)
International RAC	(1)		(112)		(9)		(150)
Total reportable segments	663		(597)		681		(840)
All other operations(1)	0		23		13		48
Corporate(2)	(24)		(13)		(52)		(38)
Total Hertz Global	639		(587)		642		(830)
Adjustments:
Non-vehicle depreciation and amortization	(50)		(57)		(104)		(110)
Non-vehicle debt interest, net(3)	(91)		(43)		(135)		(99)
Vehicle debt-related charges(4)	(26)		(15)		(54)		(24)

Restructuring and restructuring related charges(5)	(37)		(41)		(50)		(47)
Technology-related intangible and other asset impairments(6)	0		(193)		0		(193)
Write-off of intercompany loan(12)	0		(133)		0		(133)
Information technology and finance transformation costs(7)	(4)		(8)		(10)		(25)
Reorganization items, net(8)	(469)		(23)		(513)		(23)
Pre-reorganization charges and non-debtor financing charges(9)	(17)		(45)		(40)		(45)
Gain from the Donlen Sale(10)	8		0		400		0
Other items(11)	(4)		(31)		80		(7)
Income (loss) before income taxes	$	(51)	$	(1,176)	$	216	$	(1,536)

(1)Substantially 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.

~~(2)~~(3)In 2021 includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement. See Note 6, "Debt," for further information.

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

~~(3)~~(5)Represents charges incurred under restructuring actions as defined in U.S. ~~GAAP.~~GAAP, excluding impairments and asset write-downs. See Note 8, ~~"Restructuring"~~"Restructuring," for further information. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

~~(4)~~(6)Represents the impairment of technology-related intangible assets and capitalized cloud computing implementation costs, as disclosed in Note 5, "Goodwill and Intangible Assets, Net."

~~(5)~~(7)Represents costs associated with the Company’s information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes.

~~(6)~~(8)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note ~~17,~~18, "Reorganization Items, ~~Net,~~Net." ~~including professional fees.~~

~~(7)~~(9)Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background,"~~in the second quarter of 2020~~ which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

~~(8)~~(10)Represents the net gain from the sale of the Company's Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures."

(11)Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests. InFor 2021, also includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of the year and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter. For 2020, also includes ~~$18 million for losses associated with certain vehicle damages, which were recorded in the second quarter, partially offset by~~ a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first ~~quarter. In 2019, includes a $26 million gain on marketable securities, of which $6 million was recorded in the third~~ quarter, ~~and a $15 million gain on the sale of non-vehicle capital assets, of which $3 million was recorded in the third quarter.~~

~~(9)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, which was recorded in the~~partially offset by second quarter ~~2020, as disclosed in Note 14, "Related Party Transactions."~~charges of $18 million for losses associated with certain vehicle damages.

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(12)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note ~~16—~~13, "Related Party Transactions."

Note 17—Liabilities Subject to Compromise

As a result of the Chapter 11 Emergence and implementation of the Plan of Reorganization, the Company reinstated certain liabilities that had been classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. The following table represents the reinstatement of liabilities subject to compromise, which include pre-petition liabilities that were allowed to be or that were estimated to be allowed as claims in the Chapter 11 Cases.


(In millions)	June 30, 2021


To be reinstated on the Effective Date:


Accounts payable	$	257
Accrued liabilities	99
Accrued taxes, net	14
Liabilities to be reinstated - Hertz Global	370
Stockholder's equity - Due to affiliate - Hertz	65
Liabilities to be reinstated - Hertz	$	435

The accompanying unaudited condensed consolidated balance sheet as of ~~September 30,~~December 31, 2020 includes amounts classified as liabilities subject to compromise, which ~~represent Pre-petition~~represented pre-petition liabilities the Company ~~anticipates will~~anticipated would be allowed as claims in the Chapter 11 Cases. These amounts ~~represent~~represented 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 statements of operations.Cases.

The following table summarizes liabilities subject to ~~compromise:~~compromise as of December 31, 2020.



(In millions)		~~September 30,~~December 31, 2020

Accounts payable		$	~~300~~267

Accrued liabilities(1)		~~199~~166
Accrued taxes, net		2319
Accrued interest on debt subject to compromise		7570

Debt subject to compromise~~(1)~~(2)		~~4,404~~4,443


Liabilities subject to compromise - Hertz Global	$	~~5,001~~4,965
Due from ~~Affiliate~~affiliate - Hertz~~(2)~~(3)		65
Liabilities subject to compromise - Hertz		$	~~5,066~~5,030

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

(2) See Note 6, ~~"Debt"~~"Debt," for details of ~~Pre-petition,~~pre-petition, non-vehicle debt reported as liabilities subject to compromise as of ~~September 30,~~December 31, 2020.

~~(2)~~(3) See Note ~~14,~~15, "Related Party ~~Transactions"~~Transactions," for details of a ~~Pre-petition~~pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of ~~September 30,~~December 31, 2020.

Note ~~17—~~18—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 and settlement of liabilities under the Plan of Reorganization which have been recorded as reorganization items, net in the accompanying unaudited condensed consolidated ~~statements~~statement of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~

~~For the three~~2021 and nine months ended September 30, 2020, the Company incurred $78 million and $101 million, respectively, of charges primarily for professional fees, of which $35 million was paid as of September 30, 2020, and $57 million and $9 million were recorded in accrued liabilities and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2020.

~~Note 18—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.

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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 BALANCE SHEET~~

~~(in millions)~~The following tables summarize reorganization items, net:


	~~September 30, 2020~~
~~ASSETS~~
~~Cash and cash equivalents~~	$	~~595~~
~~Restricted cash and cash equivalents~~	~~338~~
~~Total cash, cash equivalents, restricted cash and restricted cash equivalents~~	~~933~~
~~Receivables, net~~	~~448~~
~~Due from non-debtor affiliates~~	~~50,189~~
~~Prepaid expenses and other assets~~	~~652~~
~~Revenue earning vehicles, net~~	59
~~Property and equipment, net~~	~~579~~
~~Operating lease right-of-use assets~~	~~1,482~~
~~Investment in subsidiaries, net~~	~~4,567~~
~~Intangible assets, net~~	~~3,059~~
~~Goodwill~~	~~524~~
~~Total assets~~	$	~~62,492~~

~~LIABILITIES AND EQUITY~~
~~Accounts payable~~	$	~~283~~
~~Due to non-debtor affiliates~~	0
~~Accrued liabilities~~	~~466~~
~~Accrued taxes, net~~	59
~~Debt~~	18
~~Operating lease liabilities~~	~~1,449~~
~~Self-insured liabilities~~	~~252~~
~~Deferred income taxes, net~~	0
~~Total liabilities not subject to compromise~~	~~2,527~~
~~Liabilities subject to compromise~~	~~59,624~~
~~Total liabilities~~	~~62,151~~
~~Total equity attributable to the Debtors~~	~~341~~


~~Total liabilities and equity~~	$	~~62,492~~

Hertz Global



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Professional fees and other bankruptcy related costs	$	199	$	23	$	257	$	23
Loss on extinguishment of debt(1)	191		0		191		0
Backstop fee	164		0		164		0
Breakup fee(2)	77		0		77		0
Contract settlements	25		0		25		0
Cancellation of share-based compensation grants(3)	(10)		0		(10)		0
Net gain on settlement of liabilities subject to compromise	(11)		0		(22)		0
Other, net	(2)		0		(5)		0
Reorganization items, net	$	633	$	23	$	677	$	23

Hertz


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Professional fees and other bankruptcy related costs	$	199	$	23	$	257	$	23
Loss on extinguishment of debt(1)	191		0		191		0
Breakup fee(2)	77		0		77		0
Contract settlements	25		0		25		0
Cancellation of share-based compensation grants(3)	(10)		0		(10)		0
Net gain on settlement of liabilities subject to compromise	(11)		0		(22)		0
Other, net	(2)		0		(5)		0
Reorganization items, net	$	469	$	23	$	513	$	23

(1) Includes loss on extinguishment of debt resulting from the implementation of the Plan of Reorganization on the Effective Date. Primarily composed of write offs of unamortized deferred loan origination costs and early termination fees associated with terminated debt agreements. See Note 6, "Debt," for further information.

(2) Breakup fee paid to prior plan sponsors Centerbridge Partners, L.P., Warburg Pincus LLC, Dundon Capital Partners, LLC and certain of their respective affiliates and certain holders of the Senior Notes upon Emergence in accordance with an Equity Purchase and Commitment and Agreement entered into on April 3, 2021 which was subsequently terminated.

(3) See Note 12, Stock-Based Compensation for further details.

Cash payments during the three and six months ended June 30, 2021 totaled $422 million and $480 million, respectively. The Company incurred $175 million of charges during the year ended December 31, 2020 comprised primarily of professional fees, of which $102 million was paid as of December 31, 2020 and $46 million and $19 million were unpaid and recorded in accrued liabilities and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet.

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

~~(in millions)~~

Three Months Ended
September 30, 2020 Nine Months Ended
September 30, 2020
Total revenues $ 864 $ 2,737
Expenses:
Direct vehicle and operating 660 2,214
Depreciation of revenue earning vehicles and lease charges 403 2,767
Selling, general and administrative 90 387
Interest (income) expense, net 8 96
Technology-related intangible and other asset impairments 0 193
Other (income) expense, net 0 (18)
Reorganization items, net 78 101
Total expenses 1,239 5,740
Income (loss) before income taxes and equity in earnings (losses) of non-debtor entities (375) (3,003)
Income tax (provision) benefit 63 590
Equity in earnings (losses) of non-debtor entities 90 988
Net income (loss) (222) (1,425)
Total other comprehensive income (loss), net of tax 5 (27)
Comprehensive income (loss) attributable to the Debtors $ (217) $ (1,452)

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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 STATEMENT OF CASH FLOWS~~

~~(in millions)~~


	Nine Months Ended September 30, 2020

























~~Net cash provided by (used in) operating activities~~	$	~~(459)~~
~~Cash flows from investing activities:~~
~~Revenue earning vehicles expenditures~~	~~(466)~~
~~Proceeds from disposal of revenue earning vehicles~~	~~596~~
~~Non-vehicle capital asset expenditures~~	~~(71)~~
~~Proceeds from non-vehicle capital assets disposed of~~	48
~~Sales of marketable securities~~	74
~~Capital contributions to non-debtor entities~~	~~(741)~~
~~Return of capital from non-debtor entities~~	~~838~~
~~Loan to non-debtor entity~~	~~(180)~~
~~Loan repayment from non-debtor entity~~	~~189~~

~~Net cash provided by (used in) investing activities~~	~~287~~
~~Cash flows from financing activities:~~
~~Proceeds from issuance of vehicle debt~~	~~321~~
~~Repayments of vehicle debt~~	~~(467)~~
~~Proceeds from issuance of non-vehicle debt~~	~~1,553~~
~~Repayments of non-vehicle debt~~	~~(854)~~
~~Proceeds from the issuance of stock, net~~	28





~~Other~~	~~(2)~~
~~Net cash provided by (used in) financing activities~~	~~579~~

~~Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period~~	~~407~~
~~Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period~~	~~526~~
~~Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period~~	$	~~933~~

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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"). Hertz Global consolidates Hertz for financial statement purposes, and Hertz comprises approximately the entire balance of Hertz Global's assets, liabilities and operating cash flows. In addition, Hertz's operating revenues and operating expenses comprise nearly 100% of Hertz 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" and the "Company" in this MD&A for disclosures that relate to all of Hertz and Hertz Global. ~~Please refer to the defined terms in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q when reviewing the MD&A.~~

This MD&A should be read in conjunction with the MD&A presented in our ~~2019~~2020 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 ~~September~~June 30, ~~2020~~2021 (this "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 ~~them~~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.

•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.

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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)~~

•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 fleet whether owned or leased ("Average Vehicles" or "fleet capacity").

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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)

•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~~provided integrated vehicle leasing and fleet management solutions through our Donlen ~~subsidiary.~~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.

OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT

~~Overview~~Impact of ~~the Impact from~~ COVID-19 on our Business

~~The outbreak of~~In March 2020, the World Health Organization declared COVID-19 ~~was declared~~ a pandemic, ~~in March 2020 and has spread to~~affecting multiple global regions. The impact of this pandemic has been ~~and will likely continue to be~~ extensive in many aspects of society, which has resulted ~~in, and will likely continue to result~~ in significant disruptions to the global economy, as well as businesses around the world. In an effort to halt the ~~outbreak~~spread of COVID-19, many governments around the world ~~initially~~ placed significant restrictions on travel, individuals voluntarily reduced their air and other travel in attempts to avoid of the outbreak, and many businesses announced closures and imposed travel restrictions. In 2021, individuals across the globe have increasingly gained access to COVID-19 vaccinations, particularly in the U.S., resulting in COVID-19 case declines in many countries around the world. Many of the government-imposed restrictions have been lifted or eased, and travel, particularly domestic leisure travel, has experienced a strong rebound. However, beginning in late second quarter of 2021, stronger variants of the COVID-19 virus have begun to spread in many countries. There isremains continued uncertainty about the ~~magnitude and~~ duration of the negative impact from COVID-19 and the length and scope of travel restrictions and business closures that may be imposed by governments of impacted countries or voluntarily undertaken by individuals and private businesses.

In response to the outbreak of COVID-19, we began aggressively managing costs and (i) initiated a restructuring program affecting approximately 11,000 employees in our U.S. RAC segment and U.S. corporate operations, the majority of which were previously furloughed, (ii) actively negotiated to abate or defer our airport rent and concession payments, (iii) substantially reduced capital expenditures; (iv) eliminated discretionary marketing spend; and (v) reduced our commitments to purchase vehicles by approximately $4.0 billion from original commitments in our U.S. RAC segment, the majority of which were delivered during the second quarter of 2020.

Although we took aggressive action to eliminate costs, we faced significant ongoing monthly expenses, including monthly payments under our Operating Lease, pursuant to which Hertz leases vehicles which we use in our U.S.

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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)~~

rental car operations. On April 27, 2020, Hertz did not make certain payments in accordance with the Operating Lease, and as a result, an amortization event was in effect as of May 5, 2020 for all series of notes issued by HVF II and a liquidation event was in effect with respect to the Series 2013-A Notes issued by HVF II. Refer to Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 1, ~~"Background" for additional information on the Forbearance Agreement and Waiver Agreements which expired on May 22, 2020.~~

Voluntary Petitions for Bankruptcy and Emergence

~~In connection with the expiration of the Forbearance Agreement and the Waiver Agreements described above and the continuing economic impact from COVID-19, on~~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~~were jointly administered for procedural purposes only under the caption In ~~re: the~~re The Hertz Corporation, et al., Case No. 20-11218 (MFW). On May 14, 2021, the Debtors filed the Plan of Reorganization, and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021. On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021, the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11. 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 web site is not incorporated by reference and does not constitute part of this Form 10-Q.

~~Liquidity Considerations Following the Chapter 11 Filing~~

On July 24, 2020, per the terms of the Interim Lease Order entered on July 24, 2020, the Debtors were directed, among other things, to (i) make $650 million of base rent payments under the Operating Lease to the HVF trustee in the amount of six equal monthly payments of approximately $108 million commencing in July 2020 through December 2020; (ii) dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, inclusive, where the proceeds of the dispositions, subject to certain exclusions set forth in the Interim Lease Order, will be used to make payments under the Operating Lease; (iii) fund interest payments on the Operating Lease from draws on certain existing letters of credit, which are reimbursable by the Debtors; and (iv) suspend litigation relating to the Operating Lease until January 15, 2021 with all parties reserving all rights with respect to future litigation claims. For the period from June 1, 2020 through September 30, 2020, we disposed of approximately 165,000 vehicles which are associated with the Interim Lease Order. Also, refer to "Liquidity and Capital Resources" section below.

As a result of the Lease Rejection Orders approved by the Bankruptcy Court in September 2020, 257 off airport and 15 airport locations with unexpired leases were authorized for rejection in our U.S. RAC segment. In October 2020, the Bankruptcy Court approved the October Lease Rejection Orders comprised of 29 airport and 24 off airport locations 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 2019 Form 10-K.

As a result of our ongoing actions to eliminate costs, in the third quarter of 2020, we (i) negotiated rent concessions in the form of abatement and payment deferrals of fixed and variable rent payments for our airport and off airport locations in the amount of $84 million which represent amounts previously due in the period between July 1, 2020 and September 30, 2020; (ii) reduced our revenue earning vehicle expenditures by $2.4 billion, or 91%, in the third quarter of 2020 compared to 2019; (iii) reduced our non-vehicle capital asset expenditures by $35 million, or 67%,in the third quarter of 2020 compared to 2019 primarily due to a reduction in information technology and finance transformation program costs; and (iv) sold 56,000, or 72%, more vehicles in our U.S. RAC segment in the third quarter of 2020 compared to 2019 ~~due to the Interim Lease Order and strength in residual values. We are continuing to review our cost structure and fleet size to align with expected rental car volumes.~~

5047

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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)

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.

On the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:

•$2.8 billion from the purchase of Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;

•$1.6 billion from the purchase of Hertz Global common stock pursuant to the Rights Offering;

•$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and

•$1.5 billion in proceeds from the Term Loans.

Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the Plan of Reorganization as follows:

•the holders of administrative, priority and secured claims received payment in cash in full;

•the holders of the approximately $1.0 billion of obligations owed with respect to the DIP Credit Agreement received payment in cash in full;

•the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;

•the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;

•the holders of the €725 million European Vehicle Notes received payment in cash in full;

•the holders of the €257 million Second HIL Credit Agreement received payment in cash in full;

•the holders of claims with respect to the Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and

All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of three percent of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either new 30-year Public Warrants, for in the aggregate of up to 18% of reorganized Hertz Global common stock issued and outstanding on the Effective Date, subject to dilution and certain conditions, or subscription rights to participate in the Rights Offering as discussed below.

In accordance with the Plan of Reorganization, Hertz Global commenced a Rights Offering, under which eligible holders of Hertz Global's common stock and certain eligible holders of the Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to $1.6 billion of shares of the reorganized Hertz Global common stock at a purchase price of $10.00 per share. Pursuant to the EPCA, the Backstop Parties agreed to purchase all unsubscribed shares in the Rights Offering. The final expiration date for the Rights Offering occurred on June 15, 2021, with eligible holders subscribing to purchase 127,362,114 shares (approximately $1.3 billion), with the Backstop Parties to purchase the remaining 36,137,887 shares (approximately $361 million). Hertz Global closed the Rights Offering upon emergence from the Chapter 11 Cases on June 30, 2021. Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share).

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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)

~~interim fleet financing, giving~~On the ~~Debtors~~Effective Date, in accordance with the ~~ability~~Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of Series A Preferred Stock to ~~replenish their vehicle fleet~~Apollo and received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees.

On the Effective Date, in accordance with the ~~future,~~Plan of Reorganization and ~~(ii)~~the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants, subject to certain conditions. The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate. The Public Warrants have an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends and certain dilutive events.

On the Effective Date, reorganized Hertz entered into the First Lien Credit Agreement that provides for an aggregate amount of $2.8 billion comprised of the First Lien RCF in an aggregate committed amount of $1.3 billion plus Term Loans in an aggregate principal amount of $1.5 billion. Additionally, reorganized Hertz entered into a new HVF III ABS facility in an aggregate of $6.8 billion comprised of variable funding notes with a principal amount up to ~~$800 million can be used for working capital~~$2.8 billion and ~~general corporate purposes. The DIP Loans are available~~medium term notes in ~~multiple draws~~an aggregate principal amount of at least (i) $250 million each, or (ii) the remaining available commitments if such commitments are less than $250 million. The DIP Loans bear interest at a rate of LIBOR plus 7.25% (subject to a 1.00% floor), which is reduced to LIBOR plus 6.75% upon a significant repayment of Pre-petition first lien debt.$4.0 billion.

~~Refer to~~

For additional information about our on restructured debt and equity, see Note 6, "Debt," and Note 10, "Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global," in Part I,1, Item 1 of this ~~Quarterly~~Quarter Report on Form ~~10-Q in Note 6, "Debt" for further details.~~10-Q.

~~On November 5,~~In 2021, as a result of our actions to continue to eliminate costs, we (i) initiated a restructuring program in our International RAC segment; and (iii) decreased our vehicle expenditures $820 million, or 17%, in the six months ended June 30, 2021 compared to the 2020 ~~Hertz Global issued a press release announcing that it secured commitments for~~period; and (iv) reduced our capital expenditures by $5 million, or 38%, and by $55 million, or 76%, in the three and six months ended June 30, 2021, respectively, compared to the 2020 periods. We continue to review our cost structure and fleet ~~financing totaling $4 billion~~size to align with expected rental car volumes, including in response to increases in travel as indicated by traveler throughput increases beginning in March 2021 and ~~has filed a motion for approval of Hertz entering into the documentation for the financing~~steadily rising thereafter, as measured by the Bankruptcy Court. Upon approval, and together with the up to $1 billion of our debtor-in-possession financing that may be used for equity in our fleet financing subsidiary, we will have access to up to $5 billion in total funding to support its fleet financing needs.U.S. Transportation Security Administration.

~~NYSE Delisting~~

As a result of the filing of the Chapter 11 Cases, on October 29, 2020, the NYSE informed us that Hertz Global common stock is no longer suitable for listing on the NYSE and that the NYSE has suspended trading in Hertz Global's common stock (NYSE ticker symbol: HTZ) after the market close on October 29, 2020. As a result of the suspension and expected delisting, Hertz Global's common stock began trading exclusively on the OTC market on October 30, 2020 under the symbol HTZGQ.

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. However, as a result of the Interim Lease Order, Hertz will dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, where the proceeds from the dispositions will be used to make payments under the Operating Lease. See the "Liquidity and Capital Resources" section of this MD&A for further information.

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~~ 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 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.

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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)

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 -~~We also had revenues from vehicle leasing and fleet management services by our Donlen business, ~~and other business activities.~~which was sold on March 30, 2021.

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

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

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 relating to revenue earning vehicles, including 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;

•Interest expense, net; and

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

Our ~~Business~~Reportable Segments

In the second quarter of 2021, in connection with the Chapter 11 Emergence, and changes in how our CODM regularly reviews operating results and allocates resources, we revised our reportable segments to include Canada, Latin America and the Caribbean in our 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 ~~three~~two 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.~~Americas RAC -– Rental of vehicles, as well as sales of value-added services, in the U.S.;, Canada, Latin America and the Caribbean;

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

•~~All Other Operations - Comprised~~ consists primarily of our ~~Donlen business, which provides vehicle leasing and fleet management services,~~Europe operating segment and other ~~business activities.~~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.

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 during the second and third quarters of the year. However asthe continuing semiconductor microchip manufacturing shortage (the "Chip Shortage") has impacted our ability to obtain a ~~result~~sufficient supply of new vehicles to align with rental demands and may continue to do so through the ~~COVID-19 mitigation actions, we initiated a restructuring program in the second~~first quarter of ~~2020 affecting approximately 11,000 employees~~2022. The Chip Shortage may result in our U.S. RAC segment and U.S. corporate operations. Additionally, as a result of the Interim Lease Order, Hertz will dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, where the proceeds from the dispositions will be used to make payments under the Operating Lease.increased vehicle acquisition costs. A number of our other major operating costs, including 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,

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THE HERTZ CORPORATION AND SUBSIDIARIES

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

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. ~~As a result~~During the first half of 2021, the Bankruptcy Court approved the rejection of the ~~Lease Rejection Orders in September 2020, 257~~real property leases with respect to 278 off airport locations and 1534 airport locations with unexpired leases were authorized by the Bankruptcy Court for rejection in our ~~U.S. RAC segment. Additionally, in October 2020, the Bankruptcy Court approved the October Lease Rejection Orders comprised of 29 airport and 24 off airport locations in our U.S.~~Americas RAC segment.

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Operating Overview

The global COVID-19 pandemic ~~has continued~~began to ~~cause a substantial reduction to~~lessen its impact on airline travel in the second quarter of 2021. U.S. airline travel saw traveler throughput increase, as measured by the U.S. Transportation Security Administration, beginning in March 2021 and continuing to rise in the second quarter of 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 third quarter as reflected in Total RPD and Transaction Days. Consequently, we expect increased demand and improved pricing to continue in the remainder of 2021, particularly as anticipated increases in business travel begin to compliment the recent increases in leisure travel, absent an adverse impact from a COVID-19 resurgence such as may occur as a result of the delta variant or some other more virulent strain.

The following charts provide several key factors influencing our results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020. As a large portion of our business is generated at airport locations, these disruptions during our peak season have had,~~2021 and ~~we expect it to continue to have, a material adverse impact on our results of~~2020.

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

~~operations until such travel returns to historic levels. The following provides an overview of our business and financial performance and key factors influencing our results:~~

~~U.S. RAC~~

◦~~3Q 2020 versus 3Q 2019:~~

▪~~Total revenues decreased $1.1 billion, or 56%~~

▪~~Total RPU decreased 35% and Total RPD decreased 1%~~

▪~~Transaction Days decreased 57%~~

▪~~Depreciation of revenue earning vehicles and lease charges decreased 57% to $182 million~~

▪~~Depreciation Per Unit Per Month decreased 35% to $161~~

▪~~Vehicle Utilization decreased to 52% from 79%~~

▪~~DOE as a percentage of total revenues increased to 75% from 56%~~

▪~~SG&A as a percentage of total revenues decreased to 5% from 6%~~

◦~~Nine months 2020 versus Nine months 2019:~~

▪~~Total revenues decreased $2.5 billion, or 47%~~

▪~~Total RPU decreased 40% and Total RPD decreased 2%~~

▪~~Transaction Days decreased 47%~~

▪~~Depreciation of revenue earning vehicles and lease charges decreased 13% to $1.1 billion~~

▪~~Depreciation Per Unit Per Month was flat~~

▪~~Vehicle Utilization decreased to 49% from 80%~~

▪~~DOE as a percentage of total revenues increased to 78% from 59%~~

▪~~SG&A as a percentage of total revenues increased to 8% from 7%~~

~~International RAC~~

◦~~3Q 2020 versus 3Q 2019:~~

▪~~Total revenues decreased $449 million, or 64%, and decreased $459 million, or 64%, excluding the~~(1) Includes impact of foreign currency exchange at average rates ("fx").

▪~~Total RPU decreased 29% and Total RPD decreased 13%~~(2) Results shown are in constant currency as of December 31, 2020.

▪~~Transaction Days decreased 60%~~

▪~~Depreciation of revenue earning vehicles and lease charges decreased 53% to $59 million, and decreased $69 million, or 54%, excluding fx~~

▪~~Depreciation Per Unit Per Month decreased 8% to $183~~

▪(3) The percentages shown in this chart reflect Vehicle Utilization ~~decreased to 65% from 80%~~

▪~~DOE as a percentage of total revenues increased to 71% from 55%~~

▪~~SG&A as a percentage of total revenues increased to 22% from 9%~~

◦~~Nine months 2020~~ versus ~~Nine months 2019:~~

▪~~Total revenues decreased $939 million, or 55%, and decreased $933 million or 55%, excluding fx~~

▪~~Total RPU decreased 35% and Total RPD decreased 10%~~

▪~~Transaction Days decreased 50%~~

▪~~Depreciation of revenue earning vehicles and lease charges decreased 31% to $228 million, and decreased $98 million, or 30%, excluding fx~~

▪~~Depreciation Per Unit Per Month increased 2% to $202~~

▪~~Vehicle Utilization decreased to 55% from 77%~~

▪~~DOE as a percentage of total revenues increased to 77% from 59%~~

▪~~SG&A as a percentage of total revenues increased to 19% from 10%~~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

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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)~~

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.

Critical Accounting Estimates

The ~~impacts~~continued uncertainty of the 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

COVID-19 may have a significant impact on the used-vehicle market, resulting in a material deterioration of residual values. This deterioration could impact our current fleet and sales plans resulting in changes to the holding periodOur principal assets are revenue earning vehicles, which represent approximately 50% of our ~~vehicles~~total assets as ~~well as our ability to dispose~~ of ~~vehicles in the period originally anticipated.~~June 30, 2021. 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.

Recoverability of Goodwill and Indefinite-lived Intangible Assets

Due to the impact related to COVID-19, our reduction in cash flow projections, the filing of the Chapter 11 Cases and declines in the stock price of Hertz Global, we tested the recoverability of our goodwill and indefinite-lived intangible assets as of June 30, 2020, and based on the quantitative test, no impairment was recorded in the second quarter of 2020. However, the fair values of certain tradenames, which are indefinite-lived intangible assets, in our U.S. RAC and International RAC segments were in excess by 3% and 18% of the carrying values of $934 million and $560 million, respectively.

We test the recoverability of our goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by ~~ASC~~Topic 350. We

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 our reduction in cash flow projections. 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 of June 30, 2021, we determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to ~~our~~its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases, were materially consistent with the assumptions utilized in our ~~June 30, 2020~~March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of

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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)

other indicators noted in ~~ASC~~Topic 350, we concluded there were no indicators of impairment triggered ~~in accordance with ASC 350~~for our Americas RAC or International RAC segments in the ~~third~~second quarter of ~~2020.~~2021.

~~Further deterioration~~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~~ 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 ~~the~~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 ~~impact~~continued uncertainty of impacts from 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.

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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)

~~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.

CONSOLIDATED RESULTS OF OPERATIONS -– HERTZ


		Three Months Ended September 30,				Percent Increase/(Decrease)			Nine Months Ended September 30,									Percent Increase/(Decrease)		Three Months Ended June 30,									Percent Increase/(Decrease)		Six Months Ended June 30,				Percent Increase/(Decrease)
($ In millions)	($ In millions)	2020		2019			2020				2019				($ In millions)		2021				2020						2021				2020
Total revenues	Total revenues	$	1,268	$	2,836		(55)	%			$	4,023			$	7,454				(46)		%	Total revenues	$	1,873			$		832	NM		$	3,161	$	2,755	15%
Direct vehicle and operating expenses	Direct vehicle and operating expenses	832		1,492		(44)			2,777				4,147					(33)	Direct vehicle and operating expenses	946					652				45		1,724		1,845		(7)
Depreciation of revenue earning vehicles and lease charges	Depreciation of revenue earning vehicles and lease charges	347		667		(48)			1,634				1,892					(14)	Depreciation of revenue earning vehicles and lease charges	116					609				(81)		359		1,285		(72)
Non-vehicle depreciation and amortization																			Non-vehicle depreciation and amortization	50					57				(12)		104		110		(5)
Selling, general and administrative expenses	Selling, general and administrative expenses	143		232		(38)			519				723					(28)	Selling, general and administrative expenses	172					164				5		321		368		(13)
Interest expense, net:	Interest expense, net:																		Interest expense, net:
Vehicle	Vehicle	110		134		(18)			360				372					(3)	Vehicle	98					132				(26)		202		250		(19)
Non-vehicle	Non-vehicle	17		68		(75)			116				209					(44)	Non-vehicle	91					43				NM		135		99		36
Interest expense, net	Interest expense, net	127		202		(37)			476				581					(18)	Interest expense, net	189					175				8		337		349		(3)
Technology-related intangible and other asset impairments	Technology-related intangible and other asset impairments	—		—		NM			193				—					NM	Technology-related intangible and other asset impairments	—					193				(100)		—		193		(100)
Write-off of intercompany loan	Write-off of intercompany loan	—		—		NM			133				—					NM	Write-off of intercompany loan	—					133				(100)		—		133		(100)
Other (income) expense, net	Other (income) expense, net	—		(6)		NM			(15)				(37)					(59)	Other (income) expense, net	(10)					2				NM		(13)		(15)		(16)
Reorganization items, net	Reorganization items, net	78		—		NM			101				—					NM	Reorganization items, net	469					23				NM		513		23		NM
(Gain) from the sale of a business																			(Gain) from the sale of a business	(8)					—				NM		(400)		—		NM
Income (loss) before income taxes	Income (loss) before income taxes	(259)		249		NM			(1,795)				148					NM	Income (loss) before income taxes	(51)					(1,176)				NM		216		(1,536)		NM
Income tax (provision) benefit	Income tax (provision) benefit	36		(75)		NM			259				(79)					NM	Income tax (provision) benefit	46					219				NM		(33)		224		NM
Net income (loss)	Net income (loss)	(223)		174		NM			(1,536)				69					NM	Net income (loss)	(5)					(957)				NM		183		(1,312)		NM
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	1		(4)		NM			7				(4)					NM	Net (income) loss attributable to noncontrolling interests	1					5				(78)		2		6		(66)
Net income (loss) attributable to Hertz	Net income (loss) attributable to Hertz	$	(222)	$	170	NM			$	(1,529)			$	65				NM	Net income (loss) attributable to Hertz	$	(4)				$	(952)			NM		$	185	$	(1,306)	NM
Adjusted Corporate EBITDA(a)	Adjusted Corporate EBITDA(a)	$	(26)	$	392	NM			$	(855)			$	595				NM	Adjusted Corporate EBITDA(a)	$	639				$	(587)			NM		$	642	$	(830)	NM

~~Footnotes to~~The footnote in the table above ~~are~~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 ~~September~~June 30, ~~2020~~2021 Compared with Three Months Ended ~~September~~June 30, ~~2019~~2020

Total revenues ~~decreased $1.6~~increased $1.0 billion in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due primarily tofrom increased travel demand resulting from the ~~impact from COVID-19~~easing of government-imposed travel restrictions, where there was ~~a decrease~~an increase of $1.1 billion and ~~$449~~$105 million in our ~~U.S.~~Americas RAC and International RAC segments, respectively. ~~U.S.~~Americas RAC revenues ~~decreased~~increased due primarily to ~~lower volume.~~higher volume and pricing. Excluding a $9$24 million fx impact, revenues for our International RAC segment ~~decreased $459~~increased $81 million ~~also~~ due to ~~lower~~higher pricing and volume, ~~and pricing.~~primarily in Australia.

DOE ~~decreased $661~~increased $295 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due primarily to ~~a decrease~~an increase of ~~$451~~$262 million and ~~$208~~$36 million in our ~~U.S.~~Americas RAC and International RAC segments, respectively. DOE in our ~~U.S.~~Americas RAC segment ~~decreased~~increased due primarily to ~~lower~~higher volume driven by ~~the impact from COVID-19 on total revenues described above and~~increased travel demand, partially offset by a reduction in fixed costs. Excluding a $7$17 million fx impact, DOE in our International RAC segment ~~decreased $215~~increased $19 million due primarily to ~~lower~~higher personnel costs due to restructuring initiatives and reductions in employee furloughs and associated government support across Europe and higher volume driven by the increased travel demand, partially offset by a reduction in fixed costs.

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THE HERTZ CORPORATION AND SUBSIDIARIES

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

Depreciation of revenue earning vehicles and lease charges decreased $493 million in the second quarter of 2021 compared to 2020 due primarily to a decrease of $339 million, $120 million and $34 million in our Americas RAC segment, other operations and International RAC segment, respectively. The decrease in our Americas RAC segment is due primarily to a reduced fleet size in connection with our restructuring, the Chip Shortage affecting new vehicle production and strength in residual values, partially offset by the acquisition of used vehicles. The decrease in other operations was due to the sale of our Donlen business in the first quarter of 2021. Excluding a $3 million fx impact, depreciation decreased $37 million in our International RAC segment due primarily to the timing of the Second HIL Credit Agreement, a right sizing of the fleet, the Chip Shortage affecting new vehicle production and strength in residual values.

SG&A increased $8 million in the second quarter of 2021 compared to 2020 due primarily to increased marketing spend in our Americas RAC segment.

Vehicle interest expense, net decreased $34 million in the second quarter of 2021 compared to 2020 due primarily to lower debt levels primarily in our Americas RAC segment.

Non-vehicle interest expense, net increased $49 million in the second quarter of 2021 compared to 2020 due primarily to higher average interest rates primarily due to the DIP Credit Agreement which was entered into in the third quarter of 2020 and the loss on extinguishment related to the HIL Credit Agreement, partially offset by interest on certain non-vehicle debt being suspended as a result of filing the Chapter 11 Cases.

We had a $193 million impairment in the second quarter of 2020 of technology-related intangible assets and capitalized cloud computing implementation costs in our corporate operations due to uncertainty surrounding our financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases.

We incurred a charge of $133 million in the second quarter of 2020 in our corporate operations resulting from ~~COVID-19~~the full write-off of the 2019 Master Loan with Hertz Holdings due to the filing of the Chapter 11 Cases.

We had other income of $10 million for the second quarter of 2021 which was due in part to the gain on ~~total~~the sales of certain franchises in our Americas RAC segment compared to other expense of $2 million in the second quarter of 2020.

We incurred $469 million of net reorganization charges in the second quarter of 2021, primarily in our corporate operations, which was comprised primarily of professional fees associated with the Chapter 11 Cases, the loss on extinguishment of certain debt resulting from the implementation of the Plan of Reorganization, a prior plan sponsor breakup fee and other miscellaneous charges related to the implementation of the Plan of Reorganization. In the second quarter of 2020, we incurred $23 million of net reorganization charges in our corporate operations primarily for professional fees associated with the Chapter 11 Cases.

We recognized a pre-tax gain of $8 million in the second quarter of 2021 related to the sale of our Donlen business, which was completed in the first quarter of 2021 resulting from the finalization of certain post-closing adjustments in the second quarter of 2021.

The effective tax rate was 90% and 19% in the second quarter of 2021 and 2020, respectively, and we recorded a tax benefit of $46 million and $219 million in the second quarter of 2021 and 2020, respectively. The increase in the effective tax rate and decrease in tax benefit were primarily due to changes in our financial performance, changes in earnings of loss jurisdictions for which no tax benefit can be recognized and non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

Six Months Ended June 30, 2021 Compared with Six Months Ended June 30, 2020

Total revenues ~~described above.~~increased $407 million in the first half of 2021 compared to 2020 due primarily to an increase of $646 million in our Americas RAC segment, partially offset by a decrease of $37 million in our International RAC

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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)

~~Depreciation of revenue earning vehicles and lease charges decreased $319 million in the third quarter of 2020 compared to 2019~~segment. Americas RAC revenues increased due primarily to ~~a decrease of $238 million~~increased pricing resulting from increased travel demand and $67 million in our U.S. RAC and International RAC segments, respectively. The decrease in our U.S. RAC segment is due primarily to a reduction in fleet size in response to pandemic-related volume declines and strength in residual values. Excluding a $2 million fx impact, depreciation in our International RAC segment decreased $69 million due primarily to a reduced fleet size.

SG&A decreased $89 million in the third quarter of 2020 compared to 2019 due primarily to lower marketing costs in our U.S. and International RAC segments and lower personnel costs in our U.S. RAC segment.

~~Vehicle interest expense, net decreased $24 million in the third quarter of 2020 compared to 2019 due primarily to lower debt levels primarily in our U.S. RAC segment and lower market interest rates.~~

~~Non-vehicle interest expense, net decreased $51 million in the third quarter of 2020 compared to 2019 due primarily to interest~~constraints on ~~certain non-vehicle debt being suspended as a result of filing the Chapter 11 Cases, lower debt levels in the third quarter of 2020 compared to 2019 and lower market interest rates.~~

~~We had other income of $6 million in the third quarter of 2019, which was primarily comprised of a $6 million gain on marketable securities.~~

~~We incurred $78 million of net reorganization charges in the third quarter of 2020 in our corporate operations for professional fees associated with the Chapter 11 Cases.~~

The effective tax rate was 14% and 30% in the third quarter of 2020 and 2019, respectively, and we recorded a tax benefit of $36 million in the third quarter of 2020 compared to a tax provision of $75 million in the third quarter of 2019. The effective income tax rate and related tax benefit in 2020 compared to 2019 were driven by increased losses on our operationsvehicles due to the ~~effect of COVID-19, primarily offset by the impact of valuation allowances on net deferred tax assets for certain foreign and domestic jurisdictions.~~

~~Nine Months Ended September 30, 2020 Compared with Nine Months Ended September 30, 2019~~

Total revenues decreased $3.4 billion in the nine months of 2020 compared to 2019 due primarily to a decrease of $2.5 billion and $939 million in our U.S. RAC and International RAC segments, respectively. U.S. RAC revenues decreased due primarily to lower volume.Chip Shortage affecting new vehicle production. Excluding a $7$42 million fx impact, ~~of fx,~~ revenues for our International RAC segment decreased ~~$933~~$79 million ~~also~~ due to lower volume, ~~and pricing.~~partially offset by higher pricing in Australia.

DOE decreased ~~$1.4 billion~~$121 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to a decrease of ~~$949~~$69 million and ~~$421~~$57 million in our ~~U.S.~~International RAC and ~~International~~Americas RAC segments, respectively. Excluding a $30 million fx impact DOE for International RAC decreased $98 million due to lower volume, lower personnel costs and lower fixed costs, partially offset by increases related to restructuring initiatives. The decrease in ~~U.S.~~Americas RAC DOE was due primarily to lower ~~volume driven by the impact from COVID-19 on total revenues described above and a reduction in fixed costs. Excluding the $6 million impact of fx, DOE for International RAC decreased $415 million~~fleet costs due to reduced fleet size, lower ~~volume driven by the impact~~personnel costs due to market constraints and lower fixed costs resulting from ~~COVID-19 on total revenues described above.~~cost-reduction initiatives.

Depreciation of revenue earning vehicles and lease charges decreased ~~$259~~$926 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due to decreases of ~~$164~~$603 million, $245 million and ~~$101~~$78 million in our ~~U.S.~~Americas RAC segment, other operations and International RAC ~~segments,~~segment, respectively. The decrease in our ~~U.S.~~Americas RAC segment is due primarily to a reduction in fleet size due to the Chapter 11 Cases and the Chip Shortage affecting new vehicle production. The decrease in ~~response~~other operations was due to ~~pandemic-related volume declines and strength~~the sale of our Donlen business in ~~residual values.~~the first quarter of 2021. Excluding ~~the $3~~a $6 million impact of fx, depreciation of revenue earning vehicles and lease charges for our International RAC segment decreased ~~$98~~$84 million due primarily to ~~a reduced~~right sizing the fleet ~~size.~~and the Chip Shortage affecting new vehicle production.

SG&A decreased ~~$204~~$46 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower marketing ~~costs in our U.S.~~spend and ~~International RAC segments,~~ lower personnel costs in our ~~U.S.~~Americas RAC segment. Excluding a $6 million fx impact, SG&A in our International RAC segment decreased $15 million due primarily to lower personnel costs due to employee furloughs and ~~lower information technology and finance transformation costs in our corporate operations.~~government support across Europe related to COVID-19, partially offset by increases related to restructuring initiatives.

~~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)~~

Vehicle interest expense, net decreased ~~$13~~$48 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower debt levels, partially offset by higher market interest rates, ~~and lower vehicle debt levels~~ primarily in our ~~International~~Americas RAC segment.

Non-vehicle interest expense, net ~~decreased $93~~increased $36 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to ~~lower debt levels, lower market~~higher average interest rates ~~and~~primarily due to the ~~suspension~~DIP Credit Agreement which was entered into in the third quarter of 2020, partially offset by interest on certain non-vehicle debt being suspended as a result of filing the Chapter 11 Cases.

We had a $193 million impairment of technology-related intangible assets and capitalized cloud computing implementation costs in the ~~nine months~~first half of 2020 in our corporate operations due to uncertainty surrounding our financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases.

We incurred a charge of $133 million in the ~~nine months~~first half of 2020 in our corporate operations resulting from the full write-off of the 2019 Master Loan with Hertz Holdings due to the filing of the Chapter 11 Cases.

We had other income of $13 million in the first half of 2021 compared to other income of $15 million in the ~~nine months~~first half of ~~2020 compared~~2020. Other income in 2021 was due in part to ~~$37 million~~the gain on the sales of certain franchises in ~~the nine months of 2019.~~our Americas RAC segment. Other income in 2020 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, partially offset by $4 million in pension-related settlement charges. ~~Other income in 2019 was primarily comprised of a $26 million gain on marketable securities and a $15 million gain on the sale of non-vehicle capital assets.~~

We incurred ~~$101~~$513 million of net reorganization charges in the ~~nine months~~first half of ~~2020~~2021, primarily in our corporate operations, which was comprised primarily of professional fees associated with the Chapter 11 Cases, the loss on extinguishment of certain debt resulting from the implementation of the Plan of Reorganization, a prior plan sponsor breakup fee and other miscellaneous charges related to the implementation of the Plan of Reorganization. In the

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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)

first half of 2020, we incurred $23 million of net reorganization charges in our corporate operations primarily for professional fees associated with the Chapter 11 Cases.

The effective tax rate was 15% in the ~~nine months~~first half of 2021 and 2020, ~~was 14% compared to 53% in the nine months of 2019.~~respectively. We recorded a tax ~~benefit~~provision of ~~$259~~$33 million in the ~~nine~~six months of ~~2020~~2021 compared to a tax ~~provision~~benefit of ~~$79~~$224 million in the ~~nine~~six months of ~~2019.~~2020. The ~~effective income~~increase in the tax ~~rate and related~~provision in 2021 compared to 2020 was primarily due to changes in our financial performance, changes in earnings of loss jurisdictions for which no tax benefit ~~in 2020 compared to 2019 were driven by increased losses on our operations due to the effect of COVID-19, primarily~~can be recognized and non-deductible reorganization costs, partially offset by the ~~impact of valuation allowances on net deferred~~ tax ~~assets for certain foreign and domestic jurisdictions.~~benefits associated with European restructuring initiatives.

CONSOLIDATED RESULTS OF OPERATIONS -– HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had $1 million and $2 million, respectively of interest expense, net for the ~~nine months ended September 30,~~second quarter and first half of 2020, ~~and $2 million and $5 million of interest expense, net for the three and nine months ended September 30, 2019,~~ respectively, that was incremental to the amounts shown for Hertz. ~~This amount represents~~These amounts represent 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.

Hertz Global had $164 million of reorganization items, net for the second quarter and first half of 2021, respectively, that was incremental to the amounts shown for Hertz. These amounts represent certain effects from the implementation of the Plan of Reorganization included in Hertz Global's unaudited condensed consolidated statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

For the ~~nine months ended September 30,~~second quarter and first half of 2020, Hertz had $27 million and $28 million, respectively, of income tax benefit that was incremental to the amounts shown for Hertz Global due primarily to the master loan write-off included in Hertz's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report on Form 10-Q. ~~For the three and nine months ended September 30, 2019, Hertz had $1 million of income tax provision that was incremental to the amounts shown for Hertz Global.~~

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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 September 30,						Percent Increase/(Decrease)			Nine Months Ended September 30,											Percent Increase/(Decrease)		Three Months Ended June 30,										Percent Increase/(Decrease)		Six Months Ended June 30,						Percent Increase/(Decrease)
($ In millions, except as noted)	($ In millions, except as noted)	2020			2019				2020					2019					($ In millions, except as noted)		2021				2020							2021				2020
Total revenues	Total revenues	$	866		$	1,962			(56)	%				$	2,780				$	5,266				(47)		%	Total revenues	$	1,643				$		543	NM			$	2,610		$	1,964	33%
Depreciation of revenue earning vehicles and lease charges	Depreciation of revenue earning vehicles and lease charges	$	182		$	420		(57)			$	1,054				$	1,217					(13)	Depreciation of revenue earning vehicles and lease charges	$	80				$	419				(81)		$	290		$	893		(68)
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	648		$	1,099		(41)			$	2,178				$	3,127					(30)	Direct vehicle and operating expenses	$	793				$	530				49		$	1,434		$	1,491		(4)
Direct vehicle and operating expenses as a percentage of total revenues	Direct vehicle and operating expenses as a percentage of total revenues	75		%	56		%				78		%			59		%					Direct vehicle and operating expenses as a percentage of total revenues	48		%			98		%					55		%	76		%
Non-vehicle depreciation and amortization																							Non-vehicle depreciation and amortization	$	43				$	47				(8)		$	87		$	89		(2)
Selling, general and administrative expenses	Selling, general and administrative expenses	$	46		$	125		(63)			$	224				$	365					(39)	Selling, general and administrative expenses	$	69				$	64				9		$	121		$	182		(34)
Selling, general and administrative expenses as a percentage of total revenues	Selling, general and administrative expenses as a percentage of total revenues	5		%	6		%				8		%			7		%					Selling, general and administrative expenses as a percentage of total revenues	4		%			12		%					5		%	9		%
Vehicle interest expense	Vehicle interest expense	$	77		$	93		(17)			$	260				$	260					—	Vehicle interest expense	$	77				$	99				(22)		$	149		$	186		(20)
Reorganization items, net																							Reorganization items, net	$	94				$	(1)				NM		$	80		$	(1)		NM
Adjusted EBITDA	Adjusted EBITDA	$	(10)		$	269		NM			$	(678)				$	432					NM	Adjusted EBITDA	$	664				$	(485)				NM		$	690		$	(690)		NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	17,971			41,399			(57)			62,499					118,153						(47)	Transaction Days (in thousands)(b)	24,992					13,321					88		45,243			45,684			(1)
Average Vehicles (in whole units)(c)	Average Vehicles (in whole units)(c)	376,443			566,229			(34)			465,929					540,930						(14)	Average Vehicles (in whole units)(c)	350,122					517,973					(32)		325,364			526,247			(38)
Vehicle Utilization(c)	Vehicle Utilization(c)	52		%	79		%				49		%			80		%					Vehicle Utilization(c)	78		%			28		%					77		%	48		%
Total RPD (in whole dollars)(d)	Total RPD (in whole dollars)(d)	$	46.27		$	46.67		(1)			$	42.81				$	43.79					(2)	Total RPD (in whole dollars)(d)	$	65.42				$	37.95				72		$	57.43		$	41.50		38
Total RPU Per Month (in whole dollars)(e)	Total RPU Per Month (in whole dollars)(e)	$	736		$	1,137		(35)			$	638				$	1,063					(40)	Total RPU Per Month (in whole dollars)(e)	$	1,557				$	325				NM		$	1,331		$	600		NM
Depreciation Per Unit Per Month (in whole dollars)(f)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	161		$	247		(35)			$	251				$	250					—	Depreciation Per Unit Per Month (in whole dollars)(f)	$	76				$	270				(72)		$	149		$	283		(47)
Percentage of program vehicles as of period end	Percentage of program vehicles as of period end	4		%	16		%				4		%			16		%					Percentage of program vehicles as of period end	5		%			6		%					5		%	6		%

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 ~~September~~June 30, ~~2020~~2021 Compared with Three Months Ended ~~September~~June 30, ~~2019~~2020

Total ~~U.S.~~Americas RAC revenues ~~decreased~~increased $1.1 billion in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due primarily to ~~lower volume.~~higher volume and pricing. The ~~57% decrease~~increase in Transaction Days was driven by ~~the impact from COVID-19 with declines~~volume increases in leisure and most business categories ~~excluding delivery services where volume~~as government-imposed travel restrictions began to lift due to decreasing COVID-19 cases primarily across the U.S. The increase in Total RPD was due primarily to stronger pricing in leisure and most business categories resulting from increased pricing across the industry due to increased ~~year over year. Volume decreased in both our airport~~travel demand and ~~off airport business by 70% and 35%, respectively. Off airport~~industry-wide constraints on vehicles due to the Chip Shortage affecting new vehicle production during the second quarter of 2021. Airport revenues comprised ~~48%~~71% of total revenues for the segment in the ~~third~~second quarter of 2021 as compared to 40% in the second quarter of 2020, ~~as compared to 32% in the third quarter of 2019,~~ due primarily to ~~customer demand changes associated with COVID-19.~~the lifting of air travel restrictions discussed above.

Depreciation of revenue earning vehicles and lease charges for ~~U.S.~~Americas RAC decreased ~~$238~~$339 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019.~~2020. Average Vehicles decreased ~~34%~~ due in part to a reduction in fleet size in ~~response to pandemic-related volume declines.~~connection with our restructuring and the Chip Shortage affecting new vehicle production, partially offset by the acquisition of used vehicles. Depreciation Per Unit Per Month decreased to ~~$161~~$76 in the ~~third~~second quarter of ~~2020~~2021 compared to ~~$247~~$270 in the ~~third~~second quarter of ~~2019~~2020 due primarily to strength in residual ~~values~~.values.

DOE for U.S. RAC decreased $451 million in the third quarter of 2020 compared to 2019 due primarily to lower volume driven by the impact from COVID-19 on total revenues described above, lower personnel costs due to an

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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)

~~employee restructuring program that commenced~~DOE for Americas RAC increased $262 million in the second quarter of 2021 compared to 2020 ~~in response~~due primarily to ~~COVID-19~~higher volume driven by the increased travel demand discussed above, partially offset by lower facility costs due primarily to rent abatements and ~~other cost-reduction initiatives during~~ the ~~third quarter~~consolidation of ~~2020.~~our off airport locations.

SG&A for ~~U.S.~~Americas RAC ~~decreased $79~~increased $6 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due primarily to ~~lower~~increased marketing spend as travel demand increased the lifting of air travel restrictions discussed above and ~~personnel costs in response to COVID-19.~~the start of our peak season.

Vehicle interest expense for ~~U.S.~~Americas RAC decreased ~~$16~~$22 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower debt levels ~~as a result~~resulting from vehicle dispositions associated with the Chapter 11 Cases.

Reorganization items, net for Americas RAC increased $95 million in the second quarter of 2021 compared to 2020 primarily due to the loss on extinguishment of certain vehicle ~~dispositions~~debt resulting from the ~~Interim Lease Order.~~implementation of the Plan of Reorganization and certain contract-related charges.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Total ~~U.S.~~Americas RAC revenues ~~decreased $2.5 billion~~increased $646 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to ~~lower volume.~~higher pricing. The ~~47% decrease in Transaction Days and 2% decrease~~increase in Total RPD ~~were~~was driven primarily by ~~the impact from COVID-19 with declines~~increased pricing in leisure and most business categories ~~excluding delivery services, where volume~~resulting from increased pricing across the industry due to increase travel demand and ~~pricing increased year over year. Volume decreased in both our airport and off airport locations by 58% and 30%, respectively. Off airport~~industry-wide constraints on vehicles due to the Chip Shortage affecting new vehicle production. Airport revenues comprised ~~44%~~68% of total revenues for the segment in the ~~nine months~~first half of ~~2020~~2021 as compared to ~~32%~~58% in ~~2019,~~the first half of 2020, due primarily to ~~customer demand changes~~the lifting of air travel restrictions that had been in place associated with COVID-19.

Depreciation of revenue earning vehicles and lease charges for ~~U.S.~~Americas RAC decreased ~~$164~~$603 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019.~~2020. Average Vehicles decreased ~~14%~~ due primarily to a reduction in fleet size in ~~response to pandemic-related volume declines~~connection with our restructuring and ~~strength in residual values.~~the Chip Shortage affecting new vehicle production. Depreciation Per Unit Per Month in the ~~nine months~~first half of 2021 decreased to $149 compared to $283 in the first half of 2020 ~~was comparable~~due primarily to ~~2019.~~strength in residual values.

DOE for ~~U.S.~~Americas RAC decreased ~~$949~~$57 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower ~~volume driven by the impact from COVID-19 on total revenues for the nine months of 2020 described above,~~fleet costs due to a reduced fleet size, lower personnel costs due to ~~an employee restructuring program that commenced in the second quarter of 2020 in response to COVID-19~~market constraints and ~~other~~lower facilities costs resulting from cost-reduction ~~initiatives during the third quarter of 2020.~~initiatives.

SG&A for ~~U.S.~~Americas RAC decreased ~~$141~~$61 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower marketing and personnel costs due to cost-reduction initiatives.

Vehicle interest expense for Americas RAC decreased $37 million in ~~response~~the first half of 2021 compared to ~~COVID-19.~~2020 due primarily to lower debt levels resulting from vehicle dispositions associated with the Chapter 11 Cases.

Reorganization items, net for Americas RAC increased $81 million in the first half of 2021 compared to 2020 primarily due to the loss on extinguishment of certain vehicle debt resulting from the implementation of the Plan of Reorganization and certain contract-related charges.

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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)

International ~~Rental Car~~RAC

Three Months Ended
September 30, Percent Increase/(Decrease) Nine Months Ended
September 30, Percent Increase/(Decrease)
($ in millions, except as noted) 2020 2019 2020 2019
Total revenues $ 253 $ 702 (64) % $ 755 $ 1,695 (55) %
Depreciation of revenue earning vehicles and lease charges $ 59 $ 126 (53) $ 228 $ 329 (31)
Direct vehicle and operating expenses $ 179 $ 386 (54) $ 579 $ 1,001 (42)
Direct vehicle and operating expenses as a percentage of total revenues 71 % 55 % 77 % 59 %
Selling, general and administrative expenses $ 56 $ 60 (6) $ 142 $ 169 (16)
Selling, general and administrative expenses as a percentage of total revenues 22 % 9 % 19 % 10 %
Vehicle interest expense $ 21 $ 27 (21) $ 66 $ 73 (9)
Adjusted EBITDA $ (35) $ 115 NM $ (207) $ 157 NM
Transaction Days (in thousands)(b)
6,194 15,631 (60) 19,314 38,884 (50)
Average Vehicles (in whole units)(c)
104,045 213,294 (51) 127,216 184,307 (31)
Vehicle Utilization(c)
65 % 80 % 55 % 77 %
Total RPD (in whole dollars)(d)
$ 39.75 $ 45.44 (13) $ 39.36 $ 43.68 (10)
Total RPU Per Month (in whole dollars)(e)
$ 789 $ 1,110 (29) $ 664 $ 1,024 (35)
Depreciation Per Unit Per Month (in whole dollars)(f)
$ 183 $ 199 (8) $ 202 $ 198 2
Percentage of program vehicles as of period end 32 % 47 % 32 % 47 %



	Three Months Ended June 30,						Percent Increase/(Decrease)	Six Months Ended June 30,						Percent Increase/(Decrease)
($ in millions, except as noted)	2021			2020				2021			2020
Total revenues	$	230		$	125		84%	$	415		$	452		(8)%
Depreciation of revenue earning vehicles and lease charges	$	36		$	70		(48)	$	69		$	147		(53)
Direct vehicle and operating expenses	$	154		$	118		30	$	279		$	347		(20)
Direct vehicle and operating expenses as a percentage of total revenues	67		%	95		%		67		%	77		%
Non-vehicle depreciation and amortization	$	4		$	4		11	$	9		$	9		(7)
Selling, general and administrative expenses	$	40		$	36		11	$	70		$	79		(11)
Selling, general and administrative expenses as a percentage of total revenues	17		%	29		%		17		%	17		%
Vehicle interest expense	$	21		$	22		(4)	$	41		$	41		1
Reorganization items, net	$	12		$	—		NM	$	12		$	—		NM
Adjusted EBITDA	$	(1)		$	(112)		(99)	$	(9)		$	(150)		(94)
Transaction Days (in thousands)(b)	4,893			3,900			25	9,291			11,964			(22)
Average Vehicles (in whole units)(c)	71,044			114,405			(38)	69,019			123,226			(44)
Vehicle Utilization(c)	76		%	37		%		74		%	53		%
Total RPD (in whole dollars)(d)	$	47.07		$	35.54		32	$	44.81		$	41.90		7
Total RPU Per Month (in whole dollars)(e)	$	1,081		$	404		NM	$	1,005		$	678		48
Depreciation Per Unit Per Month (in whole dollars)(f)	$	174		$	227		(23)	$	169		$	222		(24)
Percentage of program vehicles as of period end	36		%	38		%		36		%	38		%

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 ~~September~~June 30, ~~2020~~2021 Compared with Three Months Ended ~~September~~June 30, ~~2019~~2020

Total revenues for International RAC ~~decreased $449~~increased $105 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019~~2020 due to ~~lower volume~~higher pricing and ~~pricing. Transaction days decreased 60% and Total RPD decreased 13%.~~volume. Excluding a $9$24 million fx impact, revenues ~~decreased $459~~increased $81 million due primarily to ~~lower volume and~~higher pricing across ~~all~~most leisure categories, primarily in Australia, and higher volume across most leisure and business categories ~~driven by the impact of COVID-19.~~as government-imposed travel restrictions were eased resulting in increased travel demand.

Depreciation of revenue earning vehicles and lease charges for International RAC decreased ~~$67~~$34 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019.~~2020. Excluding a $2$3 million fx impact, depreciation decreased ~~$69~~$37 million. Average Vehicles for International RAC decreased ~~51%~~due primarily to a reduction in fleet size due to ~~downsizing~~timing of the Second HIL Credit Agreement, right sizing of the fleet ~~as a result of COVID-19.~~and the Chip Shortage affecting new vehicle production. Depreciation Per Unit Per Month for International RAC decreased to ~~$183~~$174 for the ~~third~~second quarter of ~~2020~~2021 compared to ~~$199~~$227 in ~~2019~~2020 due to the strength in residual values.

DOE for International RAC ~~decreased $208~~increased $36 million in the ~~third~~second quarter of ~~2020~~2021 compared to ~~2019.~~2020. Excluding a $7$17 million fx impact, DOE ~~decreased $215~~increased $19 million due primarily to ~~lower~~higher personnel costs due to restructuring initiatives and reductions in employee furloughs and associated government support across Europe and higher volume driven by the ~~impact~~increased travel demand discussed above, partially offset by lower facility costs resulting from ~~COVID-19 on total revenues described above and lower personnel costs due to government support across Europe related to COVID-19 and reduced seasonal staff for the peak travel season in Europe.~~

~~Vehicle interest expense for International RAC decreased 21% in the third quarter of 2020 compared to 2019 due to downsizing the fleet as a result of COVID-19.~~cost-reduction initiatives.

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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 International RAC increased $4 million in the second quarter of 2021 compared to 2020. Excluding a $3 million fx impact, SG&A increased $1 million due primarily to higher personnel costs due to restructuring initiatives.

~~Nine~~

Reorganization items, net for International RAC increased $12 million in the second quarter of 2021 compared to 2020 primarily due to advisory fees related to debt refinancings and the loss on extinguishment of the European Vehicle Notes resulting from the implementation of the Plan of Reorganization.

Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Total revenues for International RAC decreased ~~$939~~$37 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 due primarily to lower volume, ~~and~~partially offset by higher pricing. Transactions Days decreased ~~50%~~22% and Total RPD ~~decreased 10%~~increased 7%. Excluding a $7$42 million fx impact, revenues decreased ~~$933~~$79 million due to lower volume ~~and pricing~~ across ~~all~~most leisure and business categories driven by ~~the~~continued impact of ~~COVID-19.~~COVID-19, partially offset by higher volume in all business categories in Australia. Volume declines were partially offset by higher pricing across most leisure and business categories, primarily in Australia.

Depreciation of revenue earning vehicles and lease charges for International RAC decreased ~~$101~~$78 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019.~~2020. Excluding a $3$6 million fx impact, depreciation decreased ~~$98~~$84 million. Average Vehicles for International RAC decreased ~~31%~~ due to ~~downsizing~~right sizing of the fleet ~~as a result of COVID-19.~~and the Chip Shortage affecting new vehicle production. Depreciation Per Unit Per Month for International RAC ~~increased~~decreased to ~~$202~~$169 in the ~~nine months~~first half of ~~2020~~2021 compared to ~~$198~~$222 in ~~2019.~~2020 due to strength in residual values.

DOE for International RAC decreased ~~$421~~$69 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019.~~2020. Excluding a $6$30 million fx impact, DOE decreased ~~$415~~$98 million due primarily to lower volume driven by the impact from COVID-19 on total revenues for the ~~nine months~~first half of ~~2020~~2021 described above, ~~and~~ lower personnel costs due to government support across Europe related to ~~COVID-19.~~COVID-19 and lower facilities costs resulting from cost-reduction initiatives, partially offset by increases related to restructuring initiatives.

SG&A for International RAC decreased ~~$26~~$9 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020. Excluding a $6 million fx impact, SG&A decreased $15 million due ~~in part~~primarily to lower ~~marketing costs.~~personnel costs due to employee furloughs and government support across Europe related to COVID-19, partially offset by increases related to restructuring initiatives.

~~Vehicle interest expense~~Reorganization items, net for International RAC ~~decreased 9%~~increased $12 million in the ~~nine months~~first half of ~~2020~~2021 compared to ~~2019~~2020 primarily due to ~~downsizing~~advisory fees related to debt refinancings and the ~~fleet as a result~~loss on extinguishment of ~~COVID-19 market conditions.~~the European Vehicle Notes resulting from the implementation of the Plan of Reorganization.

~~All Other Operations~~

~~The All Other Operations segment is primarily comprised of our Donlen business and, as such, our discussion is limited to Donlen.~~

~~Results of operations for this segment are as follows:~~

Three Months Ended
September 30, Percent Increase/(Decrease) Nine Months Ended
September 30, Percent Increase/(Decrease)
($ in millions) 2020 2019 2020 2019
Total revenues $ 149 $ 172 (13)% $ 488 $ 493 (1) %
Depreciation of revenue earning vehicles and lease charges $ 106 $ 121 (12) $ 352 $ 346 2
Direct vehicle and operating expenses $ 7 $ 7 (4) $ 19 $ 20 (3)
Selling, general and administrative expenses $ 6 $ 8 (27) $ 13 $ 22 (42)
Vehicle interest expense $ 12 $ 14 (14) $ 34 $ 39 (13)
Adjusted EBITDA $ 24 $ 24 (3) $ 71 $ 70 2
Average Vehicles - Donlen 187,876 216,925 (13) 195,086 205,809 (5)

In the third quarter of 2020 as compared to 2019, Donlen's results were flat primarily due to lower leasing volume, partially offset by the associated reduction in depreciation of revenue earning vehicles and lease charges and reduced SG&A expenses. In the nine months of 2020 versus 2019, Donlen's results were slightly favorable primarily due to a decrease in SG&A due to gains on interest rate derivative financial instruments.

~~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)~~

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, non-vehicle depreciation and amortization, non-vehicle debt interest, net, vehicle debt-related charges, restructuring and restructuring related charges, ~~goodwill, intangible and tangible asset impairments and write-downs, intercompany loan write-offs,~~ information technology and finance transformation costs, reorganization items, net, pre-reorganization items and non-debtor financing charges, gain from the sale of a business 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:

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)

Hertz

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Net income (loss) attributable to Hertz $ (222) $ 170 $ (1,529) $ 65
Adjustments:
Income tax provision (benefit) (36) 75 (259) 79
Non-vehicle depreciation and amortization 58 51 168 151
Non-vehicle debt interest, net 17 68 116 209
Vehicle debt-related charges(1)
13 10 37 29
Restructuring and restructuring related charges(2)
7 1 54 11
Technology-related intangible and other asset impairment(3)
— — 193 —
Write-off of intercompany loan(4)
— — 133 —
Information technology and finance transformation costs(5)
8 17 34 77
Reorganization items, net(6)
78 — 101 —
Pre-reorganization and non-debtor financing charges(7)
44 — 89 —
Other items(8)
7 — 8 (26)
Adjusted Corporate EBITDA $ (26) $ 392 $ (855) $ 595



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Net income (loss) attributable to Hertz	$	(4)	$	(952)	$	185	$	(1,306)
Adjustments:
Income tax provision (benefit)	(46)		(219)		33		(224)
Non-vehicle depreciation and amortization	50		57		104		110
Non-vehicle debt interest, net(1)	91		43		135		99
Vehicle debt-related charges(2)	26		15		54		24

Restructuring and restructuring related charges(3)	37		41		50		47
Technology-related intangible and other asset impairment(4)	—		193		—		193
Write-off of intercompany loan(5)	—		133		—		133
Information technology and finance transformation costs(6)	4		8		10		25
Reorganization items, net(7)	469		23		513		23
Pre-reorganization and non-debtor financing charges(8)	17		45		40		45
Gain from the Donlen Sale(9)	(8)		—		(400)		—
Other items(10)	3		26		(82)		1
Adjusted Corporate EBITDA	$	639	$	(587)	$	642	$	(830)

Hertz Global

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2020 2019 2020 2019
Net income (loss) attributable to Hertz Global $ (222) $ 169 $ (1,425) $ 61
Adjustments:
Income tax provision (benefit) (36) 74 (232) 78
Non-vehicle depreciation and amortization 58 51 168 151
Non-vehicle debt interest, net 17 70 118 214
Vehicle debt-related charges(1)
13 10 37 29
Restructuring and restructuring related charges(2)
7 1 54 11
Technology-related intangible and other asset impairment(3)
— — 193 —
Information technology and finance transformation costs(5)
8 17 34 77
Reorganization items, net(6)
78 — 101 —
Pre-reorganization and non-debtor financing charges(7)
44 — 89 —
Other items(8)
7 — 8 (26)
Adjusted Corporate EBITDA $ (26) $ 392 $ (855) $ 595



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Adjustments:
Income tax provision (benefit)	(46)		(192)		33		(196)
Non-vehicle depreciation and amortization	50		57		104		110
Non-vehicle debt interest, net(1)	91		44		135		101
Vehicle debt-related charges(2)	26		15		54		24

Restructuring and restructuring related charges(3)	37		41		50		47
Technology-related intangible and other asset impairment(4)	—		193		—		193
Information technology and finance transformation costs(6)	4		8		10		25
Reorganization items, net(7)	633		23		677		23
Pre-reorganization and non-debtor financing charges(8)	17		45		40		45
Gain from the Donlen Sale(9)	(8)		—		(400)		—
Other items(10)	3		26		(82)		1
Adjusted Corporate EBITDA	$	639	$	(587)	$	642	$	(830)

(1)In 2021 includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement. See Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

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

~~(2)~~(3)Represents charges incurred under restructuring actions as defined in U.S. ~~GAAP.~~GAAP, excluding impairments and asset write-downs. See Note 8, ~~"Restructuring" in the Notes to the Condensed Consolidated Financial Statements~~"Restructuring," in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

~~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)~~

~~(3)~~(4)Represents the impairment of technology-related intangible assets and capitalized cloud computing implementation costs, as disclosed in Note 5, "Goodwill and Intangible Assets, Net," in ~~the Notes to the Condensed Consolidated Financial Statements in~~ Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~(4)~~

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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)

(5)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note ~~14,~~15, "Related Party Transactions," ~~in the Notes to the Condensed Consolidated Financial Statements~~ in Part I, Item 1 of this Quarterly Report on Form 10-Q.

~~(5)~~(6)Represents costs associated with our information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize our systems and processes.

~~(6)~~(7)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as ~~described~~discussed in Note ~~17,~~18, "Reorganization Items, Net," ~~in the Notes to the Condensed Consolidated Financial Statements~~ in Part I, Item 1 of this Quarterly Report on Form ~~10-Q, including professional fees.~~10-Q.

~~(7)~~(8)Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," in ~~the second quarter~~Part I, Item 1 of ~~2020~~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.

~~(8)~~(9)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.

(10)Represents miscellaneous items, including non-cash stock-based compensation ~~charges. In~~charges and amounts attributable to noncontrolling interests. For 2021, also includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of the year and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter. For 2020, also includes ~~$18 million for losses associated with certain vehicle damages, which were recorded in the second quarter, partially offset by~~ a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first ~~quarter. In 2019, includes a $26~~quarter, partially offset by second quarter charges of $18 million gain on marketable securities, of which $6 million was recorded in the third quarter, and a $15 million gain on the sale of non-vehicle capital assets, of which $3 million was recorded in the third quarter.for losses associated with certain vehicle damages.

(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.

(c)Average Vehicles are determined using a simple average of the number of vehicles at the beginning and end of a given period. Among other things, Average Vehicles is used to calculate our Vehicle Utilization which represents the portion of our vehicles that are being utilized to generate ~~revenues.~~revenue. 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 September 30,									Three Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Transaction Days (in thousands)	Transaction Days (in thousands)	17,971		41,399		6,194		15,631		Transaction Days (in thousands)	24,992		13,321		4,893		3,900
Average Vehicles (in whole units)	Average Vehicles (in whole units)	376,443		566,229		104,045		213,294		Average Vehicles (in whole units)	350,122		517,973		71,044		114,405
Number of days in period (in whole units)	Number of days in period (in whole units)	92		92		92		92		Number of days in period (in whole units)	91		91		91		91
Available Car Days (in thousands)	Available Car Days (in thousands)	34,633		52,093		9,572		19,623		Available Car Days (in thousands)	31,861		47,136		6,465		10,411
Vehicle Utilization	Vehicle Utilization	52	%	79	%	65	%	80	%	Vehicle Utilization	78	%	28	%	76	%	37	%

U.S. Rental Car International Rental Car
Nine Months Ended September 30,
2020 2019 2020 2019
Transaction Days (in thousands) 62,499 118,153 19,314 38,884
Average Vehicles (in whole units) 465,929 540,930 127,216 184,307
Number of days in period (in whole units) 274 273 274 273
Available Car Days (in thousands) 127,665 147,674 34,857 50,316
Vehicle Utilization 49 % 80 % 55 % 77 %



	Americas RAC				International RAC
	Six Months Ended June 30,
	2021		2020		2021		2020
Transaction Days (in thousands)	45,243		45,684		9,291		11,964
Average Vehicles (in whole units)	325,364		526,247		69,019		123,226
Number of days in period (in whole units)	181		182		181		182
Available Car Days (in thousands)	58,891		95,777		12,492		22,427
Vehicle Utilization	77	%	48	%	74	%	53	%

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)

(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"), divided by the total number of Transaction Days. 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:~~below.


		U.S. Rental Car				International Rental Car					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2020		2019		2020		2019		($ in millions, except as noted)	2021		2020		2021		2020
Total revenues		$	866	$	1,962	$	253	$	702
Revenues										Revenues	$	1,643	$	543	$	230	$	125
Ancillary retail vehicle sales revenues	Ancillary retail vehicle sales revenues	(35)		(30)		—		—		Ancillary retail vehicle sales revenues	(7)		(38)		—		—
Foreign currency adjustment(1)	Foreign currency adjustment(1)	—		—		(7)		8		Foreign currency adjustment(1)	(1)		1		—		14
Total Rental Revenues	Total Rental Revenues	$	831	$	1,932	$	246	$	710	Total Rental Revenues	$	1,635	$	506	$	230	$	139
Transaction Days (in thousands)	Transaction Days (in thousands)	17,971		41,399		6,194		15,631		Transaction Days (in thousands)	24,992		13,321		4,893		3,900
Total RPD (in whole dollars)	Total RPD (in whole dollars)	$	46.27	$	46.67	$	39.75	$	45.44	Total RPD (in whole dollars)	$	65.42	$	37.95	$	47.07	$	35.54

U.S. Rental Car International Rental Car
Nine Months Ended September 30,
($ in millions, except as noted) 2020 2019 2020 2019
Total revenues $ 2,780 $ 5,266 $ 755 $ 1,695
Ancillary retail vehicle sales revenues (105) (92) — —
Foreign currency adjustment(1) — — 5 4
Total Rental Revenues $ 2,675 $ 5,174 $ 760 $ 1,699
Transaction Days (in thousands) 62,499 118,153 19,314 38,884
Total RPD (in whole dollars) $ 42.81 $ 43.79 $ 39.36 $ 43.68



	Americas RAC				International RAC
	Six Months Ended June 30,
($ in millions, except as noted)	2021		2020		2021		2020
Revenues	$	2,610	$	1,964	$	415	$	452
Ancillary retail vehicle sales revenues	(11)		(70)		—		—
Foreign currency adjustment(1)	(1)		2		1		49
Total Rental Revenues	$	2,598	$	1,896	$	416	$	501
Transaction Days (in thousands)	45,243		45,684		9,291		11,964
Total RPD (in whole dollars)	$	57.43	$	41.50	$	44.81	$	41.90

(1)Based on December 31, ~~2019~~2020 foreign currency exchange rates for all periods presented.

(e) Total RPU Per Month is calculated as Total Rental Revenues divided by the Average Vehicles in each period and then divided by the number of months in the period reported. The calculation of Total RPU Per Month is shown ~~below:~~below.


		U.S. Rental Car				International Rental Car					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2020		2019		2020		2019		($ in millions, except as noted)	2021		2020		2021		2020
Total Rental Revenues	Total Rental Revenues	$	831	$	1,932	$	246	$	710	Total Rental Revenues	$	1,635	$	506	$	230	$	139
Average Vehicles (in whole units)	Average Vehicles (in whole units)	376,443		566,229		104,045		213,294		Average Vehicles (in whole units)	350,122		517,973		71,044		114,405
Total revenue per unit (in whole dollars)	Total revenue per unit (in whole dollars)	$	2,208	$	3,412	$	2,364	$	3,329	Total revenue per unit (in whole dollars)	$	4,670	$	977	$	3,237	$	1,215
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)	$	736	$	1,137	$	789	$	1,110	Total RPU Per Month (in whole dollars)	$	1,557	$	325	$	1,081	$	404

U.S. Rental Car International Rental Car
Nine Months Ended September 30,
($ in millions, except as noted) 2020 2019 2020 2019
Total Rental Revenues $ 2,675 $ 5,174 $ 760 $ 1,699
Average Vehicles (in whole units)
465,929 540,930 127,216 184,307
Total revenue per unit (in whole dollars) $ 5,741 $ 9,565 $ 5,974 $ 9,218
Number of months in period (in whole units)
9 9 9 9
Total RPU Per Month (in whole dollars) $ 638 $ 1,063 $ 664 $ 1,024



	Americas RAC				International RAC
	Six Months Ended June 30,
($ in millions, except as noted)	2021		2020		2021		2020
Total Rental Revenues	$	2,598	$	1,896	$	416	$	501
Average Vehicles (in whole units)	325,364		526,247		69,019		123,226
Total revenue per unit (in whole dollars)	$	7,985	$	3,603	$	6,027	$	4,066
Number of months in period (in whole units)	6		6		6		6
Total RPU Per Month (in whole dollars)	$	1,331	$	600	$	1,005	$	678

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)

(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, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates, divided by the Average Vehicles in each 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					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2020		2019		2020		2019		($ in millions, except as noted)	2021		2020		2021		2020
Depreciation of revenue earning vehicles and lease charges	Depreciation of revenue earning vehicles and lease charges	$	182	$	420	$	59	$	126	Depreciation of revenue earning vehicles and lease charges	$	80	$	419	$	36	$	70
Foreign currency adjustment(1)	Foreign currency adjustment(1)	—		—		(2)		2		Foreign currency adjustment(1)	—		1		1		8
Adjusted depreciation of revenue earning vehicles and lease charges	Adjusted depreciation of revenue earning vehicles and lease charges	$	182	$	420	$	57	$	128	Adjusted depreciation of revenue earning vehicles and lease charges	$	80	$	420	$	37	$	78
Average Vehicles (in whole units)	Average Vehicles (in whole units)	376,443		566,229		104,045		213,294		Average Vehicles (in whole units)	350,122		517,973		71,044		114,405
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	483	$	742	$	548	$	600	Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	228	$	811	$	521	$	682
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
Depreciation Per Unit Per Month (in whole dollars)	Depreciation Per Unit Per Month (in whole dollars)	$	161	$	247	$	183	$	199	Depreciation Per Unit Per Month (in whole dollars)	$	76	$	270	$	174	$	227

U.S. Rental Car International Rental Car
Nine Months Ended September 30,
($ in millions, except as noted) 2020 2019 2020 2019
Depreciation of revenue earning vehicles and lease charges $ 1,054 $ 1,217 $ 228 $ 329
Foreign currency adjustment(1)
— — 3 —
Adjusted depreciation of revenue earning vehicles and lease charges $ 1,054 $ 1,217 $ 231 $ 329
Average Vehicles (in whole units)
465,929 540,930 127,216 184,307
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) $ 2,262 $ 2,250 $ 1,816 $ 1,785
Number of months in period (in whole units)
9 9 9 9
Depreciation Per Unit Per Month (in whole dollars) $ 251 $ 250 $ 202 $ 198



	Americas RAC				International RAC
	Six Months Ended June 30,
($ in millions, except as noted)	2021		2020		2021		2020
Depreciation of revenue earning vehicles and lease charges	$	290	$	893	$	69	$	147
Foreign currency adjustment(1)	—		1		1		17
Adjusted depreciation of revenue earning vehicles and lease charges	$	290	$	894	$	70	$	164
Average Vehicles (in whole units)	325,364		526,247		69,019		123,226
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	891	$	1,699	$	1,014	$	1,331
Number of months in period (in whole units)	6		6		6		6
Depreciation Per Unit Per Month (in whole dollars)	$	149	$	283	$	169	$	222

(1)Based on December 31, ~~2019~~2020 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 financing arrangements maintained by us in the U.S. and internationally.

Cash and Cash Equivalents

As of ~~September~~June 30, ~~2020,~~2021, we had ~~approximately $1.1~~$1.8 billion of unrestricted cash and unrestricted cash equivalents and ~~$717~~$875 million of restricted cash and restricted cash equivalents. ~~Of these amounts, approximately $435~~As of June 30, 2021, $366 million of unrestricted cash and unrestricted cash equivalents and ~~$71~~$172 million of restricted cash and restricted cash equivalents were held by our subsidiaries outside of the U.S. ~~As a result of~~Beginning in the ~~impact of COVID-19 discussed above,~~quarterly period ended March 31, 2020, we ~~changed our indefinite investment assertion~~no longer 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.

~~Liquidity Considerations Related to~~Voluntary Petitions for Bankruptcy and Emergence

The COVID-19

~~As discussed above, the outbreak of COVID-19 has~~ pandemic spread across the globe, resulting in a global economic slowdown and disruptions of travel and other industries, ~~all~~many of which ~~are continuing to~~ negatively ~~impact~~impacted our business and industry. In addition, COVID-19 ~~has~~ resulted in our employees, contractors, suppliers, customers and other business partners being prevented from conducting normal business activities ~~which in some cases is~~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.~~

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)

~~Although~~were initially requested or mandated by governmental authorities. Additionally, individuals voluntarily reduced travel in attempts to avoid the outbreak. In response, we ~~took~~began aggressive ~~action~~actions to eliminate ~~costs,~~costs. However, we faced significant ongoing monthly expenses, including monthly payments under our Operating Lease, pursuant to which Hertz leases vehicles which we use in our U.S. rental car operations. On April 27, 2020, Hertz did not make certain payments in accordance with its Operating Lease, and as a result, an amortization event was in effect as of May 5, 2020 for all series of notes issued by HVF II and a liquidation event was in effect with respect to the Series 2013-A Notes issued by HVF II. Refer to Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 1, ~~"Background" for additional information on the Forbearance Agreement and Waiver Agreements which expired on May 22, 2020.~~

~~Voluntary Petitions for Bankruptcy~~expenses.

~~In connection with the expiration of the Forbearance Agreement and the Waiver Agreements described above and the continuing economic impact from COVID-19, on~~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~~were jointly administered for procedural purposes only under the caption In re: ~~the~~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 ~~web site~~website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

In May 2020, the Bankruptcy Court approved motions filed by the Debtors that were designed primarily to mitigate the impact of the Chapter 11 Cases on the Company’s operations, customers and employees. The Debtors are authorized to conduct their business activities in the ordinary course, and pursuant to orders entered by the Bankruptcy Court, the Debtors are authorized to, among other things and subject to the terms and conditions of such orders (i) pay employees’ wages and related obligations; (ii) pay certain taxes; (iii) pay critical vendors and certain fees to airport authorities and provide adequate protection; (iv) continue to maintain certain customer programs; (v) maintain their insurance program; (vi) use certain cash collateral on an interim basis; and (viii) continue their cash management system.

~~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~~our existing debt obligations. As a result of the filing of the Chapter 11 Cases, the remaining capacity under ~~almost~~ all of our revolving credit facilities was ~~terminated, as disclosed in Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 6, "Debt."~~terminated. Consequently, the sales proceeds ~~of sales of~~from vehicles which serve as collateral for such vehicle finance facilities ~~must be~~were applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries and ~~are~~were not otherwise available to fund our operations. Additionally, we ~~are~~were precluded from accessing any of our subordinated investment in the vehicle collateral until the related defaults are waived or the ~~third party~~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~~

As disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, on May 14, 2021, the Debtors filed the Plan of Reorganization, and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021. On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021, the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from ~~vehicle receivables, excluding manufacturer rebates, as of September 30, 2020 and ongoing vehicle sales must be applied to vehicle debt in amortization.~~Chapter 11.

On ~~July 24, 2020, per~~the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:

•$2.8 billion from the purchase of reorganized Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;

•$1.6 billion from the purchase of reorganized Hertz Global common stock pursuant to the Rights Offering;

•$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and

•$1.5 billion in proceeds from our Term Loans.

Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the ~~Interim Lease Order entered on July 24, 2020,~~ Plan of Reorganization as follows:

•the ~~Debtors were directed, among other things, to (i) make $650 million~~holders of ~~base rent payments under~~ administrative, priority and secured claims received payment in cash in full;

•the Operating Lease to the HVF trustee in the amount of six equal monthly payments of approximately $108 million commencing in July 2020 through December 2020; (ii) dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, inclusive, where the proceedsholders of the dispositions, subject to certain exclusions set forth in the Interim Lease Order, will be used to make payments under the Operating Lease; (iii) fund interest payments on the Operating Lease from draws on certain existing lettersapproximately $1.0 billion of ~~credit, which are reimbursable by the Debtors; and (iv) suspend litigation relating to the Operating Lease until January 15, 2021 with all parties reserving all rights~~obligations owed with respect to ~~future litigation~~the DIP Credit Agreement received payment in cash in full;

•the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;

•the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;

•the holders of the €725 million European Vehicle Notes received payment in cash in full;

•the holders of the €257 million Second HIL Credit Agreement received payment 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)

~~claims. For~~Petition Date), subject to the ~~period from June 1, 2020 through September 30, 2020, we disposed~~rights of ~~approximately 165,000 vehicles which are associated with~~creditors (if any) to bring a claim for the ~~Interim Lease Order.~~payment of additional interest and/or premiums; and

•the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

~~As a result~~On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz entered into the First Lien Credit Agreement that provides for an aggregate amount of $2.8 billion comprised of the ~~Lease Rejection Orders approved by the Bankruptcy Court~~First Lien RCF in ~~September 2020, 257 off airport and 15 airport locations with unexpired leases were authorized for rejection~~an aggregate committed amount of $1.3 billion plus Term Loans in ~~our U.S. RAC segment. In October 2020, the Bankruptcy Court approved the October Lease Rejection Orders~~an aggregate principal amount of $1.5 billion. Additionally, reorganized Hertz entered into a HVF III ABS facility program of $6.8 billion comprised of ~~29 airport~~variable funding notes with a principal amount up to $2.8 billion and ~~24 off airport locations~~medium term notes in ~~our~~an aggregate principal amount of $4.0 billion. On the Effective Date, substantially all non-vehicle debt and all existing ABS facilities under the HVF II U.S. ~~RAC segment. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed~~ABS Program were repaid in ~~Part II, Item 7, "Contractual Obligations" included in our 2019 Form 10-K.~~

~~We currently have waivers related to the filing of the Chapter 11 Cases under our European Vehicle Notes, European ABS~~full and ~~U.K. Fleet Financing facility that expire on December 31, 2020, as disclosed~~terminated. See Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q ~~in Note 6, "Debt."~~for additional information.

As a result of our ongoing actions to eliminate costs in the third quarter of 2020, we have (i) negotiated rent concessions in the form of abatement and payment deferrals of fixed and variable rent payments for our airport and off airport locations in the amount of $84 million which represent amounts previously due in the period between July 1, 2020 and September 30, 2020; (ii) reduced our revenue earning vehicle expenditures by $2.4 billion, or 91%, in the third quarter of 2020 compared to 2019; (iii) reduced our non-vehicle capital asset expenditures by $35 million, or 67%,in the third quarter of 2020 compared to 2019 primarily due to a reduction in information technology and finance transformation program costs; and (iv) sold 56,000, or 72%, more vehicles in our U.S. RAC segment in the third quarter of 2020 compared to 2019 ~~due to the Interim Lease Order and strength in residual values~~. We ~~are continuing to review our cost structure and fleet size to align with expected rental car volumes.~~

~~Our inability to access our Senior RCF facility or retain any proceeds from the sale of vehicles under our U.S. ABS programs means~~believe that our source of liquidity is almost entirely our cash and cash equivalents on hand, cash generated from our operations and other new financing opportunities to the extent available. As of September 30, 2020, we had $1.1 billion of unrestricted cash and unrestricted cash equivalents which we believe will be sufficient to fund our operations through approximately December 31, 2020, assuming we do not experience any unforeseen liquidity needs before then, which could result in the utilization of the liquidity in advance of December 31, 2020. We believe, however, that if, among other things, (i) we cannot successfully extend the international vehicle debt waivers that expire on December 31, 2020, as disclosed in Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 6, "Debt," (ii) we cannot successfully implement a plan of reorganization, and (iii) there is not a significant recovery in the economic conditions in our major markets, our available cash and cash equivalents and cash 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 ~~not~~ be sufficient to fund operating requirements for the next twelve months. Consequently, the Debtors are seeking debtor-in-possession financing and pursuing vehicle financing for certain of their operations, either through waivers on existing facilities or entering into new arrangements to fund vehicles and vehicle leases, to supplement their sources of funding.

On October 29, 2020, the Bankruptcy Court entered an order authorizing the Debtors to obtain certain debtor-in-possession financing. In accordance with the Bankruptcy Court’s order, on October 30, 2020, Hertz, as borrower, and Hertz Global and certain of its subsidiaries located in the United States and Canada, in each case that are debtors in these Chapter 11 Cases, as guarantors, entered into the DIP Credit Agreement. The DIP Credit Agreement provides for a superpriority secured debtor-in-possession credit facility comprised of delayed-draw term loans in an aggregate amount of up to $1.65 billion, of which (i) up to $1.0 billion can be used as equity for new interim fleet financing, giving the Debtors the ability to replenish their vehicle fleet in the future, and (ii) up to $800 million can be used for working capital and general corporate purposes. The DIP Loans are available in multiple draws of at least (i) $250 million each, or (ii) the remaining available commitments if such commitments are less than $250 million. The DIP Loans bear interest at a rate of LIBOR plus 7.25% (subject to a 1.00% floor), which

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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)~~

~~is reduced to LIBOR plus 6.75% upon a significant repayment of Pre-petition first lien debt.Refer to Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 6, "Debt" for further details.~~

On November 5, 2020, Hertz Global issued a press release announcing that it secured commitments for fleet financing totaling $4 billion and has filed a motion for approval of Hertz entering into the documentation for the financing by the Bankruptcy Court. Upon approval, and together with the up to $1 billion of our debtor-in-possession financing that may be used for equity in our fleet financing subsidiary, we will have access to up to $5 billion in total funding to support its fleet financing needs.

Cash Flows - Hertz

As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, Hertz had unrestricted cash and unrestricted cash equivalents of ~~$1.1~~$1.8 billion and ~~$865 million,~~$1.1 billion, respectively, and restricted cash and restricted cash equivalents of ~~$717~~$875 million and ~~$495~~$383 million, respectively. The following table summarizes the net change in cash, cash equivalents, restricted cash and restricted cash equivalents for the periods shown:


		Nine Months Ended September 30,							Six Months Ended June 30,
(In millions)	(In millions)	2020		2019		$ Change		(In millions)	2021		2020		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	931	$	2,238	$	(1,307)	Operating activities	$	465	$	629	$	(164)
Investing activities	Investing activities	3,622		(5,492)		9,114		Investing activities	(2,316)		100		(2,416)
Financing activities	Financing activities	(4,077)		2,546		(6,623)		Financing activities	3,004		190		2,814
Effect of exchange rate changes	Effect of exchange rate changes	18		(7)		25		Effect of exchange rate changes	(8)		3		(11)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	494	$	(715)	$	1,209	Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,145	$	922	$	223

During the ~~nine months~~first half of ~~2020,~~2021, cash flows from operating activities decreased by ~~$1.3 billion~~$164 million period over period primarily due to ~~the $1.6 billion~~a $449 million reduction in working capital requirements, partially offset by a $285 million change in net ~~loss~~income attributable to Hertz, ~~driven by~~adjusted for non-cash and non-operating items. Cash flows from working capital accounts decreased primarily due to $480 million cash paid for reorganization items in the ~~impact~~first half of ~~COVID-19 discussed above,~~2021 with no comparable amount in the 2020 period. The working capital reductions resulting from reorganization items were partially offset by cash inflows resulting from revenue improvements in the ~~associated reduction~~first half of ~~$493 million in working capital requirements.~~2021 compare to 2020.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. However, as a result of the Interim Lease Order, Hertz will dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, where the proceeds from the dispositions will be used to make payments under the Operating Lease. During the ~~nine months~~first half of ~~2020,~~2021, there was a ~~$9.1~~$2.4 billion ~~decrease~~increase in the use of cash for investing activities period over ~~period. Cash~~period due primarily to a $3.0 billion net increase in cash outflows for revenue earning vehicles ~~decreased $6.3 billion~~ as we ~~reduced~~increased fleet purchases to meet stronger demand, compared to the 2020 period in which we were reducing our ~~commitments to purchase vehicles, primarily in our U.S. RAC segment,~~fleet due to ~~the impact~~impacts from COVID-19 and ~~a $2.6 billion~~the Chapter 11 Cases. In addition, cash collateral payments of $189 million, net of returns, were issued under drawn letters of credit. The net increase in uses of cash were partially offset by $818 million net proceeds received from ~~disposals of revenue earning vehicles as we accelerated~~ the ~~disposition of vehicles~~ ~~due to the Interim Lease Order and strength in residual values~~.Donlen Sale.

Net financing cash ~~outflows~~inflows were ~~$4.1~~$3.0 billion in the ~~nine months~~first half of ~~2020~~2021 compared to cash inflows of ~~$2.5~~$190 million in the 2020 period due primarily to $5.6 billion in ~~the nine months of 2019, primarily due to a $6.8 billion reduction in vehicle debt borrowings in 2020 compared to 2019 as we reduced our commitments to purchase vehicles.~~

~~Cash Flows -~~contributions from Hertz ~~Global~~

As of September 30, 2020 and December 31, 2019, Hertz Global had unrestricted cash and unrestricted cash equivalents of $1.1 billion and $865 million, respectively, and restricted cash and restricted cash equivalents of $745Holdings from net proceeds received from the

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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)

issuances of reorganized Hertz Global equity. The change in cash inflows were partially offset by $2.6 billion of net outflows related to the extinguishments of debt, partially offset by the issuance of new debt in accordance with the Plan of Reorganization.

Cash Flows - Hertz Global

As of June 30, 2021 and December 31, 2020, Hertz Global had unrestricted cash and unrestricted cash equivalents of $1.8 billion and $1.1 billion, respectively, and restricted cash and restricted cash equivalents of $875 million and ~~$495~~$411 million, respectively. The following table summarizes the net change in cash, cash equivalents, restricted cash and restricted cash equivalents for the periods shown:


		Nine Months Ended September 30,							Six Months Ended June 30,
(In millions)	(In millions)	2020		2019		$ Change		(In millions)	2021		2020		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	928	$	2,233	$	(1,305)	Operating activities	$	465	$	626	$	(161)
Investing activities	Investing activities	3,622		(5,492)		9,114		Investing activities	(2,316)		100		(2,416)
Financing activities	Financing activities	(4,046)		2,551		(6,597)		Financing activities	2,976		222		2,754
Effect of exchange rate changes	Effect of exchange rate changes	18		(7)		25		Effect of exchange rate changes	(8)		3		(11)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	522	$	(715)	$	1,237	Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,117	$	951	$	166

Fluctuations in operating, investing and financing cash flows from period to period are due to the same factors as those discussed for Hertz above, with the exception of any cash inflows or outflows related to the master loan agreement between Hertz and Hertz Global and ~~proceeds from the issuance of stock under the ATM Program as disclosed in Note 10, "Earnings (Loss) Per Share -~~any contributions by Hertz ~~Global" to the Notes to our unaudited condensed consolidated financial statements included in this Report.~~Global.

Financing

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 Financing~~III LLC ~~Rental Car Finance LLC, HFLF~~ and various 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. ~~For a discussion of additional risks associated with COVID-19, see~~

Refer to Note 6, "Debt," in Part ~~II,~~I, Item ~~1A, "Risk Factors"~~1 of this Quarterly Report on Form ~~10-Q.~~

~~Refer to Part I, Item 1, Note 6, "Debt," to the Notes to our unaudited condensed consolidated financial statements included in this Report~~10-Q for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of ~~September~~June 30, ~~2020.~~2021. Cash paid for interest during the ~~nine months~~first half of ~~2020~~2021 was ~~$78~~$158 million for interest on non-vehicle debt and ~~$275~~$203 million for interest on vehicle debt. Cash paid for interest during the ~~nine months~~first half of ~~2019~~2020 was ~~$182~~$67 million for interest on non-vehicle debt and ~~$331~~$193 million for interest on vehicle debt. The ~~$104~~$91 million ~~reduction~~increase in cash paid for non-vehicle debt interest is due primarily ~~due~~ to ~~suspending~~non-vehicle interest ~~payments on certain debt, due~~previously classified as liabilities subject to ~~the filing of the~~compromise that was paid upon emergence from Chapter 11 ~~Cases.~~on the Effective Date.

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


(In millions)	(In millions)	9/30/2020		12/31/2019		(In millions)	June 30, 2021		December 31, 2020
Cash and cash equivalents		$	1,137	$	865
Availability under the Senior RCF		—		526
Unrestricted Cash and unrestricted cash equivalents						Unrestricted Cash and unrestricted cash equivalents	$	1,820	$	1,096
Availability under the First Lien RCF						Availability under the First Lien RCF	1,185		—
Corporate liquidity	Corporate liquidity	$	1,137	$	1,391	Corporate liquidity	$	3,005	$	1,096

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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)

Covenants

~~Prior~~The First Lien Credit Agreement requires us to comply with the ~~filing~~following financial covenants: (i) until the expiration of the Chapter 11 Cases, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility contained a financial maintenance covenant applicable to such facilities. Such covenant provided that Hertz’s consolidated first lien net leverage ratio,Relief Period, as defined in the ~~credit agreements governing such facilities, as~~First Lien Credit Agreement, a minimum liquidity of $500 million in the first and last quarters of the ~~last day~~calendar year and $400 million in the second and third quarters of ~~any fiscal quarter, may not exceed~~the calendar year; and (ii) subsequent to the expiration of the Relief Period, a consolidated first lien leverage ratio (the "First Lien Ratio") of less than or equal to 3.00 to ~~1.00. As a result~~1.00 in the first and last quarters of the ~~filing~~calendar year and 3.50 to 1.00 in the second and third quarters of the ~~Chapter 11 Cases,~~calendar year. Both of the ~~Company is currently~~financial covenants disclosed above are effective beginning in ~~default under its Senior RCF,~~ the ~~Letter~~third quarter of 2021.

~~Summarized Financial Information - Hertz~~

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.

(In millions) September 30,
2020 December 31,
2019
Due from affiliates $ 66,742 $ 3,562
Total assets 67,146 25,964
Due to affiliates(1)
53,847 8,188
Total liabilities 63,080 16,982

~~(1) Due to affiliates of $53.5 billion is classified as liabilities subject to compromise as of September 30, 2020.~~


~~(In millions)~~	~~Nine Months Ended September 30,~~
	~~2020~~
~~Total revenues~~	$	~~2,701~~







~~Income (loss) before income taxes and equity in earnings (losses) of subsidiaries(1)~~	~~(3,083)~~


~~Net income (loss)~~	~~(1,529)~~

~~Net income (loss) attributable to Hertz~~	~~(1,529)~~

~~(1)Includes $2.5 billion of intercompany vehicle lease charges from non-guarantor subsidiaries.~~

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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
2021								2021
First Quarter								First Quarter	$	(1,517)	$	686	$	(831)
Second Quarter								Second Quarter	(2,619)		513		(2,106)

Total								Total	$	(4,136)	$	1,199	$	(2,937)
2020	2020							2020
First Quarter	First Quarter	$	(4,346)	$	2,212	$	(2,134)	First Quarter	$	(4,346)	$	2,212	$	(2,134)
Second Quarter	Second Quarter	(610)		2,793		2,183		Second Quarter	(610)		2,793		2,183
Third Quarter		(232)		3,765		3,533

Total	Total	$	(5,188)	$	8,770	$	3,582	Total	$	(4,956)	$	5,005	$	49
2019
First Quarter		$	(3,973)	$	2,153	$	(1,820)
Second Quarter		(4,974)		2,059		(2,915)
Third Quarter		(2,589)		1,981		(608)

Total		$	(11,536)	$	6,193	$	(5,343)

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)	Nine Months Ended September 30,								Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	($ in millions)	2020		2019		$ Change		% Change		($ in millions)	2021		2020		$ Change		% Change
U.S. Rental Car		$	3,063	$	(3,473)	$	6,536	(188)	%
International Rental Car		731		(1,291)		2,022		(157)
All Other Operations		(212)		(579)		367		(63)
Americas RAC										Americas RAC	$	(2,471)	$	(46)	$	(2,425)	NM
International RAC										International RAC	(382)		267		(649)		(243)
All other operations										All other operations	(84)		(172)		88		(51)
Total	Total	$	3,582	$	(5,343)	$	8,925	(167)		Total	$	(2,937)	$	49	$	(2,986)	NM

NM - Not meaningful

~~We reduced our revenue~~Revenue earning vehicle expenditures ~~by $2.4~~increased approximately $2.0 billion ~~or 91%,~~in the second quarter of 2021 compared to the 2020 period, primarily in our Americas RAC segment, resulting from the acquisition of used vehicles to meet the increased travel demand as government-imposed travel restrictions began to lift. Revenue earning vehicle expenditures, net decreased $3.0 billion for the ~~third quarter~~first half of ~~2020~~2021 compared to ~~2019.~~the 2020 period due primarily to fewer vehicle dispositions, primarily in our Americas RAC segment.

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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)

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) Non-Vehicle Capital Assets
(In millions) Capital
Expenditures Disposal
Proceeds Net Capital
Expenditures
2020
First Quarter $ (59) $ 23 $ (36)
Second Quarter (13) 27 14
Third Quarter (17) 6 (11)
Total $ (89) $ 56 $ (33)
2019
First Quarter $ (54) $ 19 $ (35)
Second Quarter (64) 2 (62)
Third Quarter (52) — (52)
Total $ (170) $ 21 $ (149)

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~



Cash inflow (cash outflow)	Non-Vehicle Capital Assets
(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures
2021
First Quarter	$	(9)	$	4	$	(5)
Second Quarter	(8)		6		(2)


Total	$	(17)	$	10	$	(7)
2020
First Quarter	$	(59)	$	23	$	(36)
Second Quarter	(13)		27		14


Total	$	(72)	$	50	$	(22)

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

~~As discussed above, we reduced our non-vehicle~~Non-vehicle capital asset expenditures decreased by ~~$35~~$55 million, or ~~67%~~76%, in the ~~third quarter~~first half of ~~2020~~2021 compared to ~~2019~~the 2020 period primarily due to a reduction in information technology and finance transformation program costs.

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


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Nine Months Ended September 30,								Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	($ in millions)	2020		2019		$ Change		% Change		($ in millions)	2021		2020		$ Change		% Change
U.S. Rental Car		$	11	$	(44)	$	55	(125)	%
International Rental Car		(9)		(12)		3		(25)
All Other Operations		(4)		(3)		(1)		33
Americas RAC										Americas RAC	$	(3)	$	11	$	(14)	(127)	%
International RAC										International RAC	(1)		(4)		3		(75)
All other operations										All other operations	(1)		(2)		1		(50)
Corporate	Corporate	(31)		(90)		59		(66)		Corporate	(2)		(27)		25		(93)
Total	Total	$	(33)	$	(149)	$	116	(78)		Total	$	(7)	$	(22)	$	15	(68)

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THE HERTZ CORPORATION AND SUBSIDIARIES

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

CONTRACTUAL OBLIGATIONS

~~In September 2020,~~During the first half of 2021, the Bankruptcy Court approved the ~~Lease Rejection Orders which authorized the~~ rejection of ~~certain unexpired~~real property leases pursuant to section 365 of the Bankruptcy Code comprised of ~~257~~278 off airport locations and 1534 airport locations in our ~~U.S. RAC segment. In October 2020, the Bankruptcy Court approved the October Lease Rejection Orders comprised of 29 airport and 24 off airport locations in our U.S.~~Americas RAC segment. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed in our ~~2019~~2020 Form 10-K. Due to the impact of COVID-19 discussed above, we have reduced commitments to purchase vehicles with approximately a $4.0 billion reduction from original commitments in our U.S. RAC segment, where the majority of remaining 2020 commitments were incurred during the second quarter of 2020.

Additionally, as a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," to the Notes to our unaudited condensed consolidated financial statements included in this Report, certain financings are subject to change following the conclusion of such proceedings. Refer to Note 6, "Debt," to the Notes to our unaudited condensed consolidated financial statements included in this Report for debt classified as liabilities subject to compromise as of September 30, 2020 andMaterial changes to our aggregate ~~indebtedness.~~indebtedness resulting from the Chapter 11 Emergence are disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q. The following table details our contractual cash obligations related to our indebtedness as of June 30, 2021:


			Payments Due by Period
(In millions)	Total		2021		2022 to 2023		2024 to 2025		After 2025
Vehicles:
Debt obligation	$	7,069	$	74	$	2,983	$	2,012	$	2,000
Interest on debt(1)	466		70		235		119		42
Non-Vehicle:
Debt obligation	1,560		9		37		27		1,487
Interest on debt(1)	528		35		140		156		197
Total	$	9,623	$	188	$	3,395	$	2,314	$	3,726

(1) Amounts represent the estimated commitment fees and interest payments based on the principal amounts, minimum non-cancelable maturity dates and interest rates on the debt as of June 30, 2021.

Excluding the commitments previously discussed, 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 and Analysis of Financial Condition and Results of ~~Operations"~~Operations," included in our ~~2019~~2020 Form 10-K.

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" of the Notes to our consolidated financial statements included~~Commitments," in ~~our 2019 Form 10-K under the caption~~Part II, Item 8 ~~"Financial Statements and Supplementary Data."~~of our 2020 Form 10-K.

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

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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see Note 2, "Basis of Presentation and Recently Issued Accounting Pronouncements," ~~to the Notes to our unaudited condensed consolidated financial statements included~~ in Part I, Item 1 of this ~~Report.~~Quarterly Report on Form 10-Q.

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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 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 words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. 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. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of 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, 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"~~Item 1A, "Risk Factors," included in our ~~2019~~2020 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"~~Item 1A, "Risk Factors," of our ~~2019~~2020 Form 10-K and this Quarterly Report on Form 10-Q:

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

•the impact of our ~~delisting~~recent emergence from ~~the New York Stock Exchange~~Chapter 11 on our ~~stockholders;~~

•~~the value of our common stock due to the Chapter 11 process;~~business and relationships;

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

•the length and severity of ~~the~~ COVID-19 ~~pandemic~~ and the impact on our vehicle rental business as a result of travel restrictions and business closures or disruptions;

•the impact of ~~the~~ COVID-19 ~~pandemic~~ and actions taken in response to the pandemic on global and regional economies and economic factors;

•general economic uncertainty and the pace of economic recovery, including in key global markets, when COVID-19 subsides;

•the ~~COVID-19 pandemic subsides;~~ability of our reconstituted Board of Directors to implement our business strategy;

•our ability to ~~successfully restructure~~attract and retain key personnel following our ~~substantial indebtedness or raise additional capital;~~emergence from bankruptcy;

•our ~~post-bankruptcy capital structure;~~ability to utilize our net operating loss carryforwards and built-in losses as a result of our emergence from bankruptcy;

•our ability to remediate the material weaknesses in our internal controls over financial reporting;

•our ability to maintain an effective employee retention and talent management strategy and resulting changes in personnel and employee relations;

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

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

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

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

•significant changes in the competitive environment and the effect of competition in our markets on rental volume and ~~pricing, including on our pricing policies or use of incentives;~~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 and increase customer loyalty and market share;

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

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

•our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning vehicles and to refinance our existing indebtedness;

•risks related to our indebtedness, including our substantial amount of debt, our ability to incur substantially more debt, 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 ~~senior credit facilities and letter of credit facilities, our outstanding unsecured senior notes, our outstanding senior second priority secured notes~~First Lien 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, escalation of hostilities, 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;

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

•our ability to successfully implement any strategic transactions;

•our ability to achieve anticipated cost savings from on-going strategic initiatives;

•the impact on the value of our assets and liabilities as a result of potential changes to the LIBOR reference rate;

•our ability to purchase adequate supplies of competitively priced vehicles and risks relating to the availability and increases in the cost of the vehicles we ~~purchase;~~purchase as a result of the continuing global chip manufacturing shortage;

•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;

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

•~~our ability to retain 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~~anti-corruption or ~~antibribery~~anti-bribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences, our exposure to fluctuations in foreign currency exchange rates and our ability to effectively manage our international operations after the United Kingdom's withdrawal from the European Union;consequences;

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

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

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

•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, including laws and regulations relating to environmental matters and consumer privacy and data security;~~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;

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

•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 affect our operations, the cost thereof or applicable tax rates;

•risks relating to our deferred tax assets, including the risk of an "ownership change" under the Internal Revenue Code of 1986, as amended;

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

•risks relating to our participation in multiemployer pension plans;

•shortages of fuel and increases or volatility in fuel costs;

•our ability to manage our relationships with unions;

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

•other risks and uncertainties described from time to time in periodic and current reports that we file with the SEC.

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 ~~made,~~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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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, ~~impact disclosed in Note 1, "Background,"~~ we ~~are~~were 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~~had 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 ~~September~~June 30, ~~2020,~~2021, our pre-tax operating results would increase (decrease) by approximately $3$5 million.

Additionally, we were party to various interest rate caps (the "Interest Rate Caps") and an interest rate swap which have been unwound or terminated. The Interest Rate Caps were used to mitigate the cost at inception of purchased caps (the "Purchased Caps") on our variable rate HVF II U.S. ABS program debt. The Purchased Caps remain in place and provide protection against increases in rates on our variable rate HVF II U.S. ABS debt. As a result of ~~terminating the Interest Rate Caps,~~our emergence from Chapter 11, we ~~are no longer exposed~~anticipate resuming hedging activities to ~~their associated market risk.~~manage such risks, when appropriate, going forward.

We were also party to an (receive fixed-pay floating) interest rate swap (the "Interest Rate Swap") to better match the mix of fixed and floating rate on our Donlen U.S. ABS program debt to the mix of fixed and floating rate assets (i.e. vehicle leases in our All Other Operations segment). The termination of the Interest Rate Swap may result in decreased earnings from variable rate leases in a declining rate environment, and as such, variable rate vehicle leases are now supported by a fixed rate cost of debt. We estimate the impact on our operations in our All Other Operations segment to be approximately a $2 million increase to interest expense in the fourth quarter of 2020.Income Tax Related Matters

~~Current~~In the second quarter of 2021, the IRS concluded its audit of our 2016 tax year to date dispositions of Hertz Global's common stock by certain significant shareholders, as disclosed in Part I, Item 1 of this Quarterly Report on Form 10-Q in Note 14, "Related Party Transactions", likelywhich resulted in an "ownership change" as that term is defined in Internal Revenue Code (“IRC”) Section 382. IRC Section 382 can limit the utilization of the federal and state net operating loss ("NOL") and tax credit carryforwards. We currently believe that this "ownership change" will not significantly impact our ability to utilize these U.S. tax attributes. However, there are numerous factors that are considered in the calculation of the IRC Section 382 limitation and, if one or several of these factors should be revised in the future, our ability to utilize our tax attributes could change.no audit adjustments.

In 2016, the German Tax Authorities provided us with an assessment which asserted that we underreported our German taxable income for our 2005–2010 tax years based on the German Tax Authorities’ belief that certain transfer pricing matters made by the U.S. to our German entity were overstated. To avoid the double taxation resulting in these tax years from this assessment, we pursued U.S. and German competent authority relief. We ~~expect to receive~~received notification from the German and U.S. tax authorities ~~within ninety (90) days from the filing date of this Quarterly Report on Form 10-Q that they have agreed on a~~during June 2021 indicating resolution of athe transfer pricing matter covering the 2005-2010 tax years. ~~Upon~~We have reassessed our uncertain tax positions upon receipt of ~~such notification, we will reassess~~the new information related to the matter for tax years 2011 through 2021, which did not result in a material adjustment. Our assumptions and ~~if appropriate, adjust~~estimates pertaining to uncertain tax positions require significant judgment. It is possible that the tax authorities could challenge our ~~uncertain~~estimates and assumptions used to assess the tax benefits, and the actual amount of the tax benefit related to uncertain tax positions may differ materially from these estimates.

Our emergence from Chapter 11 resulted in a change in ownership for purposes of Internal Revenue Code ("IRC") Section 382. The Company analyzed alternatives available within the ~~matter.~~IRC to taxpayers in Chapter 11 in order to minimize the impact of the ownership change and cancellation of indebtedness income on its tax attributes. Limitations imposed on our ability to use U.S. net operating losses ("NOLs") and other tax attributes to offset future taxable income may cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. Similar rules and limitations may apply for state income tax purposes.

Except for the effects described above, ~~and the impact from COVID-19 on the global economy,~~ there have been no other material changes to the information reported under Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," ~~included~~ in our ~~2019~~2020 Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES

HERTZ GLOBAL

Evaluation of Disclosure Controls and Procedures

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ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)

this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~September~~June 30, 2021, due to the identification of a material weakness in our internal control over financial reporting, as further described in Item 9A of our 2020 ~~our~~Form 10-K, the Company’s disclosure controls and procedures were ~~effective.~~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.

Changes in Internal Control over Financial Reporting

~~There were no changes in our internal control over financial reporting that occurred during~~During the three months ended ~~September~~June 30, ~~2020 that~~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 materially affected, or are reasonably likely to materially affect, ~~our~~the Company’s 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 June 30, 2021:

•Substantially completed enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.

•Continued enhanced monitoring of ITGC design and operational effectiveness through 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 June 30, 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. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~September~~June 30, 2021, due to the identification of a material weakness in our internal control over financial reporting, as further described in Item 9A of our 2020 ~~our~~Form 10-K, the Company’s disclosure controls and procedures were ~~effective.~~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.

Changes in Internal Control over Financial Reporting

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ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)

•Substantially completed enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.

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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 ~~Note 1, "Background," to the Notes to our unaudited condensed consolidated financial statements included in~~of this ~~Report.~~Quarterly Report on Form 10-Q.

For a description of certain pending legal proceedings see ~~Part I, Item 1,~~ Note ~~13,~~14, "Contingencies and Off-Balance Sheet Commitments," ~~to the Notes to our unaudited condensed consolidated financial statements included~~ in Part I, Item 1 of this ~~Report.~~Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

~~We are~~Part I, Item 1A, “Risk Factors,” of our 2020 Form 10-K for the year ended December 31, 2020, includes certain risk factors that could materially affect our business, financial condition, or future results. There have been no material changes in ~~the process of Chapter 11 reorganization cases under the Bankruptcy Code, which may cause our common stock to decrease in value or may render our common stock worthless.~~those risk factors, except as listed below:

~~On May 22, 2020, we filed voluntary petitions under~~Risks Related to our Emergence from Chapter 11 Bankruptcy

We recently emerged from bankruptcy, which could adversely affect our business and relationships.

Our having filed for bankruptcy, notwithstanding our recent emergence from the Chapter 11 bankruptcy proceedings, could adversely affect our business and relationships with customers, vendors, royalty or working interest owners, contractors, employees or suppliers. Due to uncertainties, many risks exist, including the following:

•the ability to attract, motivate, and/or retain key executives and employees may be adversely affected;

•employeesmaybemoreeasilyattractedtootheremploymentopportunities; and

•competitorsmaytakebusinessawayfromus,andourabilityto retain customers may be negatively impacted.

The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputation and we cannot assure you that having been subject to bankruptcy proceedings will not adversely affect our operations in the future.

Upon our emergence from bankruptcy, our Board of Directors was reconstituted and may implement changes in our business strategy that could affect the scope and results of our operations.

Our corporate business strategy is subject to continued development, evaluation and implementation by our management and Board of Directors. In connection with the effectiveness of the ~~Bankruptcy Code~~Plan in ~~the Bankruptcy Court, thereby commencing~~ the Chapter 11 Cases, ~~for certain debtors, including Hertz Global.~~the Company’s Board of Directors was reconstituted, and upon emergence, the Board is now made up of nine directors, of which seven directors did not serve on the former Board, plus up to three additional members to be named in the future. The ~~price~~new directors have different backgrounds, experiences and perspectives from those individuals who previously served on the board of ~~our common stock has been volatile following~~directors of the Company at the time of the commencement of the Chapter 11 Cases and, thus, may ~~decrease in value or become worthless. Accordingly, any trading~~have different views on the issues that will determine our future, including our strategic plans and priorities. The Board of Directors, as reconstituted, may determine, from time to time, to implement changes in our ~~common stock during~~business strategy which may affect our operations. There is, however, no guarantee that the ~~pendency~~strategic initiatives and plans, whether current or future, of ~~our Chapter 11 Cases is highly speculative~~the Board of Directors will be implemented in a timely manner or at all and, ~~poses substantial risks to purchasers of our common stock. In addition, on October 29, 2020, Hertz Global received notification from the NYSE that Hertz Global's common stock~~consequently, there is no ~~longer suitable for listing on the NYSE and~~guarantee that the ~~NYSE suspended trading~~operational and financial objectives of the reconstituted Board of Directors will be achieved in ~~Hertz Global's common stock after the market close on October 29, 2020. Delisting our common stock may adversely impact our liquidity, impair our stockholders'~~a timely manner or at all.

The ability to ~~buy~~attract and ~~sell our common stock, impair our ability~~retain key personnel is critical to ~~raise capital, and~~ the market price of our common stock could decrease. Recoveries in the Chapter 11 Cases for holders of common stock, if any, will depend upon our ability to negotiate and confirm a plan, the terms of such plan, the recoverysuccess of our business and may be affected by our emergence from the COVID-19 pandemic, if any, and the value of our assets. Although we cannot predict how our common stock will be treated under a plan, we expect that common stock holders would not receive a recovery through any plan unless the holders of more senior claims and interests, such as secured and unsecured indebtedness, are paid in full, which would require a significant and rapid and currently unanticipated improvement in business conditions to pre-COVID-19 or close to pre-COVID-19 levels. We also expect our stockholders’ equity to decrease as we use cash on hand to support our operations in bankruptcy. ~~Consequently, there is a significant risk that the holders of our common stock will receive no recovery under the Chapter 11 Cases and that our common stock will be worthless.~~

~~As a result~~The success of ~~the Chapter 11 Cases, we are subject to the risks and uncertainties associated with Chapter 11 Cases and operating under Chapter 11 may restrict~~ our business depends on key personnel. The ability to ~~pursue strategic~~attract and ~~operational initiatives.~~

~~For~~retain these key personnel may be affected by our emergence from bankruptcy, the ~~duration of~~uncertainties currently facing the ~~Chapter 11 Cases, our operations~~business 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 negotiate and consummate a Chapter 11 plan;~~

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

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

changes we may

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~~(DEBTORS-IN-POSSESSION)~~

ITEM 1A. RISK FACTORS (CONTINUED)

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 duemake to the ~~Chapter 11 Cases~~organizational structure to adjust to changing circumstances. Any potential delays in adopting our management incentive plan and other executive benefits and compensation may make it difficult to retain key personnel and we may ~~not~~need to enter into retention or other arrangements that could be ~~successful in securing alternative sources. Also, transactions outside the ordinary course of business~~costly to maintain. If executives, managers or other key personnel resign, retire or are ~~subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond timely to certain events~~terminated, 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,their service is otherwise interrupted, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 process may have on our business, financial condition and results of operations, and there is no certainty as to our ability to continue as a going concern.

~~Our common stock has been delisted from trading on the New York Stock Exchange (“NYSE”), which may negatively impact the trading price of our common stock and our stockholders.~~

On October 29, 2020, Hertz Global received notification from the NYSE that Hertz Global's common stock is no longer suitable for listing on the NYSE and that the NYSE suspended trading in Hertz Global's common stock after the market close on October 29, 2020. On October 30, 2020, the NYSE applied to the Securities and Exchange Commission pursuant to Form 25 to remove the common stock of Hertz Global from listing and registration on the NYSE at the opening of business on November 10, 2020. Upon deregistration of Hertz Global's common stock under Section 12(b) of the Exchange Act, Hertz Global's common stock will remain registered under Section 12(g) of the Exchange Act. As a result of the suspension and expected delisting, Hertz Global's common stock began trading exclusively on the over-the-counter market on October 30, 2020 under the symbol HTZGQ. Delisting our common stock may adversely impact its liquidity, impair our stockholders’ ability to buy and sell our common stock, impair our ability to raise capital, and the market price of our common stock could decrease. Delisting our common stock could also adversely impact the perception of our financial condition and have additional negative ramifications, including further loss of confidence by our employees, the loss of institutional investor interest and fewer business opportunities.

We may not be able to ~~raise additional capital~~replace them in a timely manner and we could experience significant declines in productivity.

Our ability to ~~meet~~utilize our ~~liquidity needs, which could have~~net operating loss carryforwards (“NOLs”) may be limited as a ~~material adverse impact on the Company.~~result of our emergence from bankruptcy.

In ~~connection~~general, Section 382 of the Internal Revenue Code (“IRC”) of 1986, as amended, provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses ("BILs"), against future taxable income in the event of a change in ownership. Emergence from Chapter 11 ~~Cases,~~bankruptcy proceedings resulted in a change in ownership for purposes of the IRC Section 382. The Company ~~entered into~~analyzed alternatives available within the IRC to taxpayers in Chapter 11 bankruptcy proceedings in order to minimize the impact of the ownership change and cancellation of indebtedness income on its tax attributes.

Limitations imposed on our ability to use NOLs and BILs to offset future taxable income may cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect and could cause such NOLs and BILs to expire unused, in each case reducing or eliminating the benefit of such NOLs and BILs. Similar rules and limitations may apply for state income tax purposes.

Risks Related to our Business

The continuing semiconductor microchip manufacturing shortage may be disruptive to our vehicle rental business and 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 ~~Senior Secured Superpriority Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”), which was approved~~severe shortage of Chips in early 2021. These same Chips and microprocessors are used in a variety of automobile parts, including 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 the shortage of Chips by the ~~Bankruptcy Court~~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 ~~October 29, 2020. For~~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 of the ~~Chapter 11 Cases, the Company expects that proceeds of the DIP Credit Agreement, together with cash on hand, cash flow~~negative impact from ~~operations~~COVID-19 in our industry may disrupt our employee retention and ~~payments received from special purpose subsidiaries~~talent management strategies and vehicle financings, if any, will be the Company’s primary source of capital to fund ongoing operations and other capital needs and that it will have limited, if any, access to additional corporate financing (which does not include vehicle financings). In the event that cash on hand, cash flow from operations, payments received from special purpose subsidiaries and vehicle financings, and availability under the DIP Credit Agreement are not sufficient to meet these liquidity needs, the Company may be required to seek additional financing, and can provide no assurance that additional financing would be available or, if available, offered on acceptable terms. The amount of any such additional financing also could be limited by negative covenants in the DIP Credit Agreement, which include restrictions on the Company’s ability to, among other things, incur additional indebtedness and create liens on assets. Further, the DIP Credit Agreement contains numerous events of default. If any event of default occurs and is continuing, subject to any applicable cure period set forth in the DIP Credit Agreement, the agent and/or lenders under the DIP Credit Agreement may seek to exercise rights and remedies, which could have a material adverse impact on the Company and its Chapter 11 Cases.affect our business operations.

~~In addition,~~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 ~~November 5, 2020, Hertz Global issued~~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 ~~press release announcing that it secured commitments for fleet financing (the “Fleet Financing”) totaling $4 billion~~failure of our employee retention and the Company has filed a motion with the Bankruptcy Court seeking approval for the Company to enter into the documentation for the Fleet Financing. If approved by the Bankruptcy Court, the Company expects to have access to up to $5 billion in total fundingtalent management strategies can include inadequate staffing levels, inability to support ~~its fleet~~bankruptcy and emergence strategy, lack of key talent, declining product quality and competitive differentiation, or eroding employee morale and productivity.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

ITEM 1A. RISK FACTORS (CONTINUED)

financing needs, comprised of the Fleet Financing, together with the up to $1 billion of the Company’s debtor-in-possession financing that may be used for equity in the fleet financing subsidiary. In the event the Bankruptcy Court does not approve the Fleet Financing motion, the Company may be required to seek additional financing to meet its fleet financing needs, and can provide no assurance that additional financing would be available or, if available, offered on acceptable terms.

~~Prosecution of the Chapter 11 Cases has consumed~~We expect substantial cost savings from our ongoing strategic initiatives, and will continue to consume a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition.

While the Chapter 11 Cases continue, our management will be required to spend a significant amount of time and effort focusing on the cases. This diversion of attention may materially adversely affect the conduct of our business, and, as a result, our financial condition and results of operations, particularly if the Chapter 11 Cases are protracted. During the Chapter 11 Cases, our employees will face considerable distraction and uncertainty and we experienced increased levels of employee attrition. In 2020, we were unable to obtain approval for an incentive plan to incentivize our senior management team, which may continue to cause us to lose senior personnel. A loss of key personnel or material erosion of employee morale could have a materially adverse effect on our ability to meet customer expectations, thereby adversely affecting our business and results of operations. The failure to retain or attract members of our management team and other key personnel could impair our ability to execute our strategy and implement operational initiatives, thereby having a material adverse effect on our financial condition and results of operations.

If we are unable to ~~negotiate and confirm a Chapter 11 plan of reorganization, we could be required to liquidate under chapter 7 (“Chapter 7”) of the Bankruptcy Code in which case~~achieve these cost savings, or sustain our ~~common stock would likely be worthless.~~

We have not yet negotiated a plan of reorganization with our creditors. If we are unable to negotiate a plan of reorganization that will result in our remaining a going concern, upon a showing of cause, the Bankruptcy Court may convert the Chapter 11 Cases to cases under Chapter 7. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution to creditors in accordance with the priorities established by the Bankruptcy Code. Holders of our common stock would likely lose their entire investment in a Chapter 7 bankruptcy.

~~Our post-bankruptcy capital~~current cost structure, ~~is yet to be determined, and any changes to our capital structure may have a material adverse effect on existing debt and security holders.~~

Our post-bankruptcy capital structure has yet to be determined 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. 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 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. Holders of our common stock may also find that their holdings no longer have any value and face highly uncertain or no recoveries under a plan. There can be no assurance that any new debt or equity securities will maintain their value at the time of issuance. If existing debt or equity holders are adversely affected by a reorganization, it may adversely affect our ability to issue new debt or equity in the future. Although we cannot predict how the claims and interests of stakeholders in the Chapter 11 Cases, including holders of common stock, will ultimately be resolved, we expect that common stock holders will not receive a recovery through any plan unless the holders of more senior claims and interests, such as secured and unsecured indebtedness (which is currently trading at a significant discount), are paid in full.

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Consequently, there is a significant risk that the holders of our common stock would receive no recovery under the Chapter 11 Cases and that our common stock will be worthless.~~

Any Chapter 11 plan that we may implement will likely be 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, our plan may be unsuccessful in its execution.

Any Chapter 11 plan that we may implement will affect both our capital structure and the ownership, structure and operation of our remaining businesses and will likely reflect 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 assumptions depends on a number of factors, including but not limited to (i) our ability to substantially change our capital structure; and (ii) the overall strength and stability of general economic conditions, both in the U.S. and in global markets. The failure of any of these factors could materially adversely affect the successful reorganization of our businesses.

In addition, any plan of reorganization will likely rely upon financial projections, including with respect to revenues, consolidated adjusted EBITDA, capital expenditures, debt service and cash flow. 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 may 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 any plan of reorganization.

~~We may be subject to claims that will not be discharged in the Chapter 11 cases, which could have a material adverse effect on our financial condition and results of operations.~~

The Bankruptcy Code provides that the confirmation of a Chapter 11 plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation. With few exceptions, all claims that arose prior to confirmation of the plan of reorganization (i) would be subject to compromise and/or treatment under the plan of reorganization and (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the plan of reorganization. Any claims not ultimately discharged through a Chapter 11 plan of reorganization could be asserted against the reorganized entities and may have an adverse effect on our financial condition and results of operations on a post-reorganization basis.

~~Operating in bankruptcy for a long period of time may harm our business.~~

~~A long period of operations in the Chapter 11 Cases under Bankruptcy Court protection~~ could have a material adverse effect on our business ~~financial condition, results of~~ operations, and liquidity. So long as the Chapter 11 Cases continue, senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations. A prolonged period of operating under Bankruptcy Court protection also may make it more difficult to retain management and other key personnel necessary to the success of our business. In addition, the longer the Chapter 11 Cases continue, the more likely it is that customers and suppliers will lose confidence in our ability to reorganize our business successfully and will seek to establish alternative commercial relationships.

So long as the Chapter 11 Cases continue, we will be required to incur substantial costs for professional fees and other expenses associated with the administration of the Chapter 11 Cases, including potentially the cost of

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

litigation. In general, litigation can be expensive and time consuming to bring or defend against. Such litigation could result in settlements or damages that could significantly affect our financial results. It is also possible that certain parties will commence litigation with respect to the treatment of their claims under a plan. It is not possible to predict the potential litigation that we may become party to, nor the final resolution of such litigation. The impact of any such litigation on our business and financial stability, however, could be material.

Should the Chapter 11 Cases be protracted, we may also need to seek new financing to fund operations. If we are unable to obtain such financing on favorable terms or at all, the chances of confirming a Chapter 11 plan may be seriously jeopardized and the likelihood that we will instead be required to liquidate our assets may increase.

~~There is no certainty as to amount of vehicle lease payments we will be required to make during the pendency of the bankruptcy case.~~

We leased the bulk of our vehicles used in our United States rental car operations under the Operating Lease. The Operating Lease requires material monthly rental payments for the use of the vehicles, and those rental payments may vary significantly under the terms of the Operating Lease. Prior to the filing of the Chapter 11 Cases, we failed to make the April 2020 rent payment under the Operating Lease, and the lessor has a Pre-petition claim for the unpaid April rent. In addition, under Section 365 of the Bankruptcy Code, we were not required to make, and did do not make, the May and June 2020 rent payments. Ultimately, the lessor will have the right to seek an administrative claim against us for an amount that the Bankruptcy Court determines to be equal to the actual and necessary benefit to us for the use of the vehicles during this period. We cannot predict the amount of such claim.

On June 11, 2020, we filed a motion with the Bankruptcy Court to reject the leases of approximately 144,000 cars under the Operating Lease (the “Rejection Motion”). On July 24, 2020, the Bankruptcy Court entered an order (the “Order”) that contained an interim settlement and agreement to suspend litigation relating to the Rejection Motion until January 15, 2021, as well as other issues related to the Operating Lease.

~~The Order provides that:~~

•THC in its capacity as servicer, shall dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, inclusive. The proceeds of the dispositions, subject to certain exclusions set forth in the order, will be used to repay debt incurred under THC’s asset backed finance facility (the “ABS”);

•THC, in its capacity as lessee, will pay in cash a total of $650 million of rent in equal monthly installments from July to December, which rent will result in additional principal payments on the ABS;

•~~Interest payments on the debt incurred under the ABS will be funded from draws on certain existing letters of credit, which are reimbursable by the Debtors;~~

•~~The Debtors will pay certain reasonable and documented fees and expenses of advisors to the ABS creditors (including the agent and trustee), as well as additional fees to the agent under the ABS; and~~

•~~Litigation relating to the Operating Lease pursuant to which the debtors lease vehicles under the ABS will be suspended and all parties reserve all rights with respect to future litigation claims.~~

There is no assurance that we will come to further agreement with the ABS lenders and, consequently, there is no certainty as to amount of vehicle lease payments we will be required to make during the pendency of the bankruptcy case.

~~Our ability to use certain of our tax assets may have been limited or may be limited in the future.~~

On May 26, 2020, entities affiliated with Carl Icahn filed a Schedule 13D/A indicating that they sold approximately 38.90% of our outstanding stock. Although we are still analyzing the impact of this sale, we believe that such sale resulted in an “ownership change” under Section 382 of the federal income tax rules. An “ownership change” could significantly limit our ability to utilize tax attributes, including net operating losses, capital loss carryovers, excess foreign tax carry forwards, and credit carryforwards, to offset future taxable income and tax liabilities. An entity that experiences an “ownership change” generally should be subject to an annual limitation on its pre-ownership change

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

tax loss carryforward equal to the equity value of the corporation immediately before the ownership change, multiplied by the long-term, tax-exempt rate posted monthly by the IRS (subject to certain adjustments). The annual limitation accumulates each year to the extent that there is any unused limitation from a prior year. The limitations under Section 382 should not limit our ability to use such tax attributes to offset future taxable income and tax liabilities. Nonetheless, our potential limitations on our ability to use such tax attributes is uncertain. If we experience a subsequent ownership change, however, it is possible that a significant portion of our tax attributes will expire before we would be able to use them to offset future taxable income. Many states adopt the federal Section 382 rules and therefore have similar limitations with respect to state tax attributes.

~~Our Chapter 11 Cases and financial condition may adversely impact our non-U.S. businesses and affiliates, which may themselves become subject to Chapter 11 Cases or other insolvency proceedings.~~

We have significant businesses and affiliates that are located outside of the United States. The filing of the Chapter 11 Cases may result in negative consequences to our businesses outside of the United States.

As previously disclosed, on May 22, 2020, and May 27, 2020, Hertz Netherlands and certain direct and indirect subsidiary companies located outside of the United States and Canada (the “International Subsidiaries”) entered into certain limited waiver agreements in respect of (i) the Issuer Facility Agreement, dated as of September 25, 2018, between, among others, International Fleet Financing No.2 B.V. as issuer, Hertz Europe Limited as issuer administrator, Credit Agricole Corporate and Investment Bank as administrative agent and BNP Paribas Trust Corporation UK Limited as issuer security trustee, as amended, restated or otherwise modified from time to time (the “European ABS Waiver”) and (ii) the Vehicle Funding Facilities Agreement dated February 7, 2013 (as amended and restated from time to time) between Hertz (U.K.) Limited, Hertz Vehicle Financing U.K. Limited and Lombard North Central Plc, (the “UK Vehicle Financing Wavier”, and together with the European ABS Waiver, the “Waivers”) pursuant to which the Waiving Parties (as defined therein) agreed to waive any default or event of default that could have resulted from the Chapter 11 cases. The Waivers were originally scheduled to expire on September 30, 2020 or, if sooner, the date on which Hertz Netherlands or certain other International Subsidiaries that are party to the Waivers failed to comply with certain agreements contained therein. Effective October 1, 2020 the Waivers were extended and are now scheduled to expire on December 31, 2020 or, if sooner, the date on which Hertz Netherlands or certain other International Subsidiaries that are party to the Waivers fail to comply with certain agreements contained therein, or do not reach agreement with their creditors as to the terms of a restructuring by October 30, 2020. The extension to the waivers was conditioned on the waiver on similar terms of the €225,000,000 aggregate principal amount outstanding of 4.125% Senior Notes due 2021 and the €500,000,000 aggregate principal amount outstanding of 5.500% Senior Notes due 2023, which was obtained on September 30, 2020 and is in effect and Hertz Netherlands and the International Subsidiaries continue not to be included in the Chapter 11 cases.

There can be no assurance that the International Subsidiaries will not in the future become or be deemed to be insolvent or otherwise need to reorganize their debt, either through the Chapter 11 proceedings or proceedings in other jurisdictions. Any such insolvency, reorganization or proceedings could have additional negative consequences with respect to our global operations and could materially and adversely affect the successful execution of any reorganization of us and our subsidiaries. Furthermore, even if additional waivers are granted or the International Subsidiaries do not otherwise file Chapter 11 or other insolvency, reorganization, or other proceedings, the Chapter 11 Cases may result in negative consequences to such businesses and affiliates.

~~The effects of the COVID-19 outbreak have been and continue to be disruptive to our vehicle rental business and will likely continue to adversely affect our business,~~ results of operations and financial condition.

~~The global COVID-19 pandemic continues to rapidly evolve and we cannot anticipate with any certainty the length or severity~~We have not yet realized all of the effects of COVID-19. The extent to which COVID-19 continues to adversely impact our business will depend on future developments that are highly uncertain, such as the following: the ultimate severity of the disease; the duration of the outbreak or future outbreaks; travel restrictions imposed by governments or businesses

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

in the markets in which we operate; the duration and scope of business closures or business disruptions; changes in customer travel preferences and demand; the impact of increasing unemployment on discretionary spending; the length of time it takes for rental pricing and volume and normal economic conditions to return; technology disruptions; our relationships with vehicle manufacturers; our liquidity position; the development of effective vaccines or treatments; and the effectiveness of actions taken to contain the disease and future outbreaks. The impacts of COVID-19 could include those areas described below:

•~~Changes in our revenues, profitability and customer demand: Our revenues and profitability have been negatively impacted during the first nine months of 2020 and~~cost savings we expect ~~this~~ to ~~continue for~~achieve from our ongoing strategic initiatives. A variety of risks could cause us not to realize the remainder of the 2020 fiscal year. We have experienced a high level of rental cancellations and a significant decline in forward bookings due to the decreased customer demand and other economic factors. Historically, we have generated a majority of our rental revenues from on-airport locations, which makes our rental car business sensitive to any decreases in air travel. Although we believe that renting a vehicle will continue to be a safe alternative and we have implemented certain procedures to mitigate the impact of COVID-19, we cannot predict when or if customer demand will return to levels before the COVID-19 pandemic.

•~~Changes to our liquidity:~~ We incur ongoing costs, which we cannot reduce in line with the significant reduction in revenues we have experienced from the COVID-19 outbreak. Such costs include our monthly fleet rental costs under our Operating Lease, facility rentals and concessions, debt service and labor costs. These costs require significant liquidity generated by operations or access to additional financing. If COVID-19 continues to have a significant negative impact on our cash flow from operations and we cannot access the capital markets, we may not be able to generate sufficient liquidity to cover our costs.

•~~Our peak season:~~ The second and third quarters of the year have historically been the strongest quarters for our vehicle rental business due to increased levels of leisure travel. COVID-19 has disrupted our business in the second and third quarters and we expect that it will continue to disrupt our business. These disruptions have significantly impacted our results of operations, financial condition, liquidity and cash flows.

•~~Our fleet:~~ In response to reduced demand due to COVID-19, we began adjusting fleet levels, leveraging our multiple used-vehicle channels, and negotiating with suppliers to reduce fleet commitments in the first nine months of 2020. We have initiated efforts to reduce our fleet size, and the relatedexpected cost ~~base, to be in line with our reduced operating results. We may also experience a decline in vehicle values which could increase the monthly payments under the Operating Lease.~~

•~~Our workforce:~~ The COVID-19 pandemic has caused us to furlough approximately 20,000 employees worldwide and we have terminated approximately 11,000 employees in our U.S. RAC segment and U.S. corporate operations, the majority of which were previously furloughed, in an effort to reduce our operating costs. This reduction in our operating costs related to our employees could create risks,savings, including but not limited to, higher than expected 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 ~~ability~~cost-savings plans; and other unexpected disruptions to ~~manage the size of~~ our workforce given uncertain future economic conditions and the ability to operate locations in affected jurisdictions. Additionally, we may incur additional costs as a result of workforce reductions or suffer from employee morale issues. We may also be unable to timely respond to a business recovery due to reductions in our workforce already enacted.business.

The interest rates of certain of our financing instruments are priced using a spread over LIBOR.

The London interbank offered rate (“LIBOR”) is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. We ~~do not expect~~typically use LIBOR as a reference rate in various of our ~~business to improve until customer demand increases and the global economy improves. To the extent~~financing transactions such that the ~~COVID-19 outbreak~~interest due to the creditors pursuant to such financing transactions is calculated using LIBOR. Our term loan agreement also contains a stated minimum floor value for LIBOR.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether or not LIBOR will cease to exist, or if new methods of calculating LIBOR will be established such that it continues to ~~adversely affect our business,~~exist after 2021 or if replacement conventions will be developed. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial ~~performance, liquidity~~institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities (“SOFR”). SOFR is observed and ~~cash flows,~~backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. As such, the future of LIBOR at this time is uncertain. At this time, due to a lack of consensus as to what rate or rates may ~~also have~~become accepted alternatives to LIBOR, it is impossible to predict the effect of ~~heightening many of the other risks identified in this Quarterly Report~~any such alternatives on ~~Form 10-Q and in the “Risk Factors” section~~our liquidity. However, if LIBOR ceases to exist, we may need to renegotiate certain of our ~~2019 Form 10-K.~~

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

If our business does not recover quickly and we are unable to successfully restructure our substantial indebtedness, obtain further waivers or forbearance or raise additional capital, there is substantial doubtfinancing agreements that ~~we will be able to continue~~utilize LIBOR as a ~~going concern.~~

factor in determining the interest rate to replace LIBOR with the new standard that is established. As ~~a result~~ of June 30, 2021, we had $4.6 billion in outstanding indebtedness tied to LIBOR. Additionally, these changes may have an impact on the ~~adverse impact from COVID-19~~value of or interest earned on any LIBOR-based marketable securities, fleet leases, loans and ~~the uncertainty about the timing and strength of recovery~~derivatives that are included in our markets, Hertz did not make certain payments in accordance with the Operating Lease, pursuant to which Hertz leases vehicles used in its U.S. rental car operations. As a result of the failure to make the full rent payments on April 27th, as of May 5, 2020 an amortization event was in effect for all series of notes issued by HVF IIfinancial assets and a liquidation event was in effect with respect to the Series 2013-A Notes issued by HVF II. As a result of the amortization event, and notwithstanding the forbearance agreement described below, proceeds of the sales of vehicles that collateralize the notes issued by HVF II must be applied to the payment of principal and interest under those notes and will not be available to finance new vehicle acquisitions for Hertz. A liquidation event means that, unless the affected noteholders otherwise agree, the affected noteholders can direct the liquidation of vehicles serving as collateral for their notes.

On May 4, 2020, prior to the occurrence of the liquidation event with respect to the Series 2013-A Notes, Hertz, HVF, HVF II and DTG Operations, Inc. entered into the Forbearance Agreement with the VFN Noteholders. Pursuant to the Forbearance Agreement that is effective against all VFN Noteholders, the VFN Noteholders agreed to forbear from exercising their liquidation remedies. The agreement with the VFN Noteholders expired on May 22, 2020. Concurrently with entering into the Forbearance Agreement, on May 4, 2020, Hertz entered into the Waiver Agreements with certain of the Lenders under its Facilities. Pursuant to the Waiver Agreements, the Lenders agreed to waive any default or event of default that could have resulted from the above referenced missed payment under the Operating Lease, waive certain defaults or events of default and extend the grace period to cure a default with respect to Hertz’s obligation to reimburse drawings that occurred under certain letters of credit during the waiver period. The Waiver Agreements expired on May 22, 2020.

In connection with the expiration of the Forbearance Agreement and the Waiver Agreements and the continuing economic impact from COVID-19, on the Petition Date, the Debtors filed voluntary Petitions under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court. The Bankruptcy Court approved motions filed by the Debtors that were designed primarily to mitigate the impact of the Chapter 11 Cases on the Company’s operations, customers and employees. The Debtors are authorized to conduct their business activities in the ordinary course, and pursuant to orders entered by the Bankruptcy Court, the Debtors are authorized to, among other things and subject to the terms and conditions of such orders, (i) pay employees’ wages and related obligations; (ii) pay certain taxes; (iii) pay critical vendors and certain fees to airport authorities; (iv) continue to maintain certain customer programs; (v) maintain their insurance program; (vi) use cash collateral on an interim basis; and (vii) continue their cash management system.

As part of its bankruptcy restructuring, Hertz has been and expects to be in discussions with key stakeholders and advisors to develop a financing strategy and structure that better reflects the economic impact of the COVID-19 global pandemic and Hertz’s ongoing operating and financing requirements. However, there can be no assurances that Hertz will be able to successfully restructure its substantial indebtedness.

Although the Order from the Bankruptcy Court was helpful to us, if our business does not recover and we cannot reach agreement to restructure our indebtedness, we may not be able to meet our obligations under our debt facilities and may not have sufficient cash flows from operations or liquidity to sustain our operations. In such circumstances, we may not be able to continue as a going concern.

~~An impairment of our goodwill and other indefinite-lived intangible assets could have a material impact to our results of operations.~~

On an annual basis as of October 1, and at interim periods when circumstances require as a result of a triggering event, we test the recoverability of our goodwill and indefinite-lived intangible assets by performing an impairment analysis. An impairment is deemed to exist if the carrying value of goodwill or indefinite-lived intangible assets

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

exceed their fair value as determined using level 3 inputs under the GAAP fair value hierarchy. The reviews of fair value involve judgment and estimates, including projected revenues, royalty rates and discount rates. A significant decline in either projected revenues, projected cash flows or the weighted average cost of capital used to determine fair value could result in a material impairment charge.

~~We have experienced an amortization event under our vehicle debt financing instruments.~~

As a result of the amortization event, proceeds of the sales of vehicles that collateralize the HVF II U.S. ABS Program and the medium term notes must be applied to the payment of principal and interest under the HVF II U.S. ABS Program and will not be available to finance new vehicle acquisitions. Currently, we cannot use any cash in the HVF II U.S. ABS Program to purchase new vehicles for our fleet. Although we anticipate that, because of the COVID-19 pandemic, we will not need to acquire additional fleet through the remainder of 2020, if our business recovers, we will ultimately need to finance new vehicle acquisitions, but we may not be able to utilize the HVF II U.S. ABS Program for that purpose and would need to finance such new vehicle acquisitions through alternative means.

Other than the items listed above, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A “Risk Factors” of our Form 10-K for the fiscal year ended December 31, 2020 and Part II, Item 1A "Risk Factors" of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020.liabilities.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 5. OTHER INFORMATION

None.

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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:	~~November~~August 9, ~~2020~~2021	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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~~(DEBTORS-IN-POSSESSION)~~

EXHIBIT INDEX


Exhibit Number		Description










222.1	~~Hertz~~	~~List~~Plan Support Agreement, dated as of ~~Guarantor Subsidiaries~~April 3, 2021 (Incorporated by reference to Exhibit 2210.1 to the ~~Quarterly~~Current Report on Form ~~10-Q~~8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on April 7, 2021).
2.2		Equity Purchase and ~~The~~Commitment Agreement, dated as of April 3, 2021 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Hertz ~~Corporation~~Global Holdings, Inc. (File No. ~~001-07541)~~001-37665), as filed on April 7, 2021).
2.3		Joinder Agreement, dated as of April 14, 2021 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on April 19, 2021).
2.4		Plan Support Agreement, dated as of May 14, 2021 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on May 19, 2021).
2.5		Equity Purchase and Commitment Agreement, dated as of May 14, 2021 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on May 19, 2021).
2.6		Second Modified Third Amended Chapter 11 ~~2020)~~Plan of Reorganization of The Hertz Corporation and Its Debtor Affiliates, dated as of June 10, 2021 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on June 16, 2021).
3.1		Second Amended and Restated Certificate of Incorporation of Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
3.2		Second Amended and Restated Bylaws of Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
3.3		Certificate of Designation relating to the Series A Preferred Stock of Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.1		Public Warrant Agreement, dated as of June 30, 2021, by and among Hertz Global Holdings, Inc. and Computershare Inc. and Computershare Trust Company, N.A., collectively as warrant agent (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.2		Registration Rights Agreement, dated as of June 30, 2021, by and among Hertz Global Holdings, Inc. and the Holder Party thereto (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.3		Credit Agreement, dated as of June 30, 2021, by and among The Hertz Corporation 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 .3 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).

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Exhibit Number		Description
10.4		Series 2021-A Supplement, dated as of June 29, 2021, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, Deutsche Bank AG, New York Branch, as program agent, the several committed note purchasers party thereto, the several conduit investors party thereto, the several funding agents for the investor groups party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.5		Series 2021-1 Supplement, dated as of June 30, 2021, among Hertz Vehicle Financing III 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 10.5 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.6		Series 2021-2 Supplement, dated as of June 30, 2021, among Hertz Vehicle Financing III 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 10.6 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.7		Base Indenture, dated as of June 29, 2021, between Hertz Vehicle Financing III LLC, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.8		Master Motor Vehicle Operating Lease and Servicing Agreement dated as of June 29, 2021, among Hertz Vehicle Financing III LLC, as lessor, The Hertz Corporation, as a lessee, servicer and guarantor, DTG Operations, Inc., as a lessee, and those permitted lessees from time to time party thereto (Incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.9		Administration Agreement, dated as of June 29, 2021, among Hertz Vehicle Financing III 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 10.9 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
10.10		Form of Indemnification Agreement of Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on July 7, 2021).
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	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	XBRL Taxonomy Extension Schema Document*

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THE HERTZ CORPORATION AND SUBSIDIARIES


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

*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	5046
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	7875
ITEM 4.	Controls and Procedures	7975
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	8078
ITEM 1A.	Risk Factors	8078
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8880
ITEM 3.	Defaults Upon Senior Securities	8880
ITEM 5.	Other Information	8880
ITEM 6.	Exhibits	8881
SIGNATURE		8982
EXHIBIT INDEX		9083


	U.S. Plan
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2020		2019		2020		2019

Interest cost	$	3	$	5	$	12	$	16
Expected return on plan assets	(5)		(6)		(15)		(17)
Net amortizations	0		2		1		5
Settlement loss(1)	1		1		5		1
Net pension expense (benefit)	$	(1)	$	2	$	3	$	5


	As of September 30, 2020				As of December 31, 2019
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value (1)		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(2)	$	4,459	$	2,859	$	3,755	$	3,840
Vehicle Debt	8,819		8,683		13,415		13,529
Total	$	13,278	$	11,542	$	17,170	$	17,369


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Total revenues	$	864	$	2,737
Expenses:
Direct vehicle and operating	660		2,214
Depreciation of revenue earning vehicles and lease charges	403		2,767
Selling, general and administrative	90		387
Interest (income) expense, net	8		96
Technology-related intangible and other asset impairments	0		193
Other (income) expense, net	0		(18)
Reorganization items, net	78		101
Total expenses	1,239		5,740
Income (loss) before income taxes and equity in earnings (losses) of non-debtor entities	(375)		(3,003)
Income tax (provision) benefit	63		590
Equity in earnings (losses) of non-debtor entities	90		988
Net income (loss)	(222)		(1,425)


Total other comprehensive income (loss), net of tax	5		(27)
Comprehensive income (loss) attributable to the Debtors	$	(217)	$	(1,452)