UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		~~March 31,~~June 30, 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

~~HTZGQ~~HTZZ

The Hertz Corporation

None

*Hertz ~~Global's~~Global Holdings, Inc.'s common stock ~~began trading exclusively~~trades 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

~~May 3,~~August 2, 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 ~~March 31~~June 30 , ~~202~~1 2021 and December 31, 20 202020		2
Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and 20 202020		3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and 20 202020		4
Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity for the Three and Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and 20 202020		5
Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31~~June 30 , ~~202~~1 2021 and 20 202020		6
The Hertz Corporation and Subsidiaries ~~(Debtor-in-Possession)~~
Condensed Consolidated Balance Sheets as of ~~March~~ 3 1June 30 , ~~202~~1 2021 and December 31, 20 202020		8
Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and 20 202020		9
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended ~~March~~June 3 10 , ~~202~~1 2021 and 20 202020		10
Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three and Six Months Ended ~~March 31,~~June 30 , 2021 and 2020		11
Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30 , 2021 and 2020		12
Notes to the Condensed Consolidated Financial Statements
Note 1	Background	14
Note 2	Basis of Presentation and Recently Issued Accounting Pronouncements	1816


Note 3	Divestitures	1918
Note 4	Revenue Earning Vehicles	2018
Note 5	Goodwill and Intangible Assets, Net	2018
Note 6	Debt	2119
Note 7	Leases	2628
Note 8	Restructuring	2729
Note 9	Income Tax (Provision) Benefit	2830
Note 101 0	Equity and Earnings (Loss) Per Share – Hertz Global	2831
Note 1 1	Public Warrants – Hertz Global	34

Note 111 2	Stock-Based Compensation	34
Note 1 3	Fair Value Measurements	2935
Note 121 4	Contingencies and Off-Balance Sheet Commitments	3037
Note 131 5	Related Party Transactions	3239
Note 141 6	Segment Information	3340

Note 1517	Liabilities Subject to Compromise	3744
Note 161 8	Reorganization Items, Net	3744
~~Note 17~~	~~Condensed Combined Debtor-in-Possession Financial Information~~	37

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,087	$	1,096	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	119		50		Vehicle	247		50
Non-vehicle	Non-vehicle	1,234		361		Non-vehicle	628		361
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	1,353		411		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	2,440		1,507		Total cash, cash equivalents, restricted cash and restricted cash equivalents	2,695		1,507
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	157		164		Vehicle	87		164
Non-vehicle, net of allowance of $56 and $46, respectively		636		613
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	793		777		Total receivables, net	1,024		777
Prepaid expenses and other assets	Prepaid expenses and other assets	786		373		Prepaid expenses and other assets	1,184		373
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	7,919		7,540		Vehicles	9,563		7,540
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,573)		(1,478)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	6,360		6,062		Total revenue earning vehicles, net	7,990		6,062
Property and equipment, net	Property and equipment, net	637		666		Property and equipment, net	618		666
Operating lease right-of-use assets	Operating lease right-of-use assets	1,580		1,675		Operating lease right-of-use assets	1,504		1,675
Intangible assets, net	Intangible assets, net	2,969		2,992		Intangible assets, net	2,947		2,992
Goodwill	Goodwill	1,045		1,045		Goodwill	1,045		1,045
Assets held for sale	Assets held for sale	0		1,811		Assets held for sale	0		1,811
Total assets(a)	Total assets(a)	$	16,610	$	16,908	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	$	141	$	29	Vehicle	$	93	$	29
Non-vehicle	Non-vehicle	390		389		Non-vehicle	687		389
Total accounts payable	Total accounts payable	531		418		Total accounts payable	780		418
Accrued liabilities	Accrued liabilities	824		759		Accrued liabilities	945		759
Accrued taxes, net	Accrued taxes, net	161		121		Accrued taxes, net	232		121
Debt:	Debt:					Debt:
Vehicle	Vehicle	6,286		6,024		Vehicle	7,035		6,024
Non-vehicle	Non-vehicle	740		243		Non-vehicle	1,514		243
Total debt	Total debt	7,026		6,267		Total debt	8,549		6,267
Public Warrants						Public Warrants	800		0
Operating lease liabilities	Operating lease liabilities	1,541		1,636		Operating lease liabilities	1,459		1,636
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	459		488
Deferred income taxes, net	Deferred income taxes, net	789		730		Deferred income taxes, net	711		730
Total liabilities not subject to compromise	Total liabilities not subject to compromise	11,342		10,419		Total liabilities not subject to compromise	13,935		10,419
Liabilities subject to compromise	Liabilities subject to compromise	4,978		4,965		Liabilities subject to compromise	0		4,965
Liabilities held for sale	Liabilities held for sale	0		1,431		Liabilities held for sale	0		1,431
Total liabilities(a)	Total liabilities(a)	16,320		16,815		Total liabilities(a)	13,935		16,815
Commitments and contingencies	Commitments and contingencies	0		0		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 shares issued and 156,206,478 shares outstanding at March 31, 2021 and December 31, 2020		2		2
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	3,049		3,047		Additional paid-in capital	6,476		3,047
Accumulated deficit		(2,491)		(2,681)
Retained earnings (Accumulated deficit)						Retained earnings (Accumulated deficit)	(2,659)		(2,681)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(195)		(212)		Accumulated other comprehensive income (loss)	(202)		(212)
Treasury stock, at cost, 2,028,932 shares at March 31, 2021 and December 31, 2020		(100)		(100)
Stockholders' equity attributable to Hertz Global	Stockholders' equity attributable to Hertz Global	265		56		Stockholders' equity attributable to Hertz Global	3,620		56
Noncontrolling interests	Noncontrolling interests	25		37		Noncontrolling interests	19		37
Total stockholders' equity	Total stockholders' equity	290		93		Total stockholders' equity	3,639		93
Total liabilities and stockholders' equity		$	16,610	$	16,908
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 ~~March 31,~~June 30, 2021 and December 31, 2020 include total assets of variable interest entities (“VIEs”) of ~~$513~~$808 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of ~~March 31,~~June 30, 2021 and December 31, 2020 include total liabilities of VIEs of ~~$393~~$694 million and $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 ~~13,~~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 March 31,
		2021		2020			Three Months Ended June 30,				Six Months Ended June 30,
Revenues:
Worldwide vehicle rental		$	1,153	$	1,749
All other operations		136		174
Total revenues		1,289		1,923
							2021		2020		2021		2020

Revenues						Revenues	$	1,873	$	832	$	3,161	$	2,755
Expenses:	Expenses:					Expenses:
Direct vehicle and operating	Direct vehicle and operating	827		1,241		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	243		677		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	156		208		Selling, general and administrative	172		164		321		368
Interest expense, net:	Interest expense, net:					Interest expense, net:
Vehicle	Vehicle	104		118		Vehicle	98		132		202		250
Non-vehicle (excludes contractual interest of $53 million for the three months ended March 31, 2021)		44		57
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	148		175		Total interest expense, net	189		176		337		351

Technology-related intangible and other asset impairments						Technology-related intangible and other asset impairments	0		193		0		193
Other (income) expense, net	Other (income) expense, net	(3)		(17)		Other (income) expense, net	(10)		2		(13)		(15)
Reorganization items, net	Reorganization items, net	42		0		Reorganization items, net	633		23		677		23
(Gain) from the sale of a business	(Gain) from the sale of a business	(392)		0		(Gain) from the sale of a business	(8)		0		(400)		0
Total expenses	Total expenses	1,021		2,284		Total expenses	2,088		1,876		3,109		4,160
Income (loss) before income taxes	Income (loss) before income taxes	268		(361)		Income (loss) before income taxes	(215)		(1,044)		52		(1,405)
Income tax (provision) benefit	Income tax (provision) benefit	(79)		4		Income tax (provision) benefit	46		192		(33)		196
Net income (loss)	Net income (loss)	189		(357)		Net income (loss)	(169)		(852)		19		(1,209)
Net (income) loss attributable to noncontrolling interests	Net (income) loss attributable to noncontrolling interests	1		1		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	$	190	$	(356)	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		142		Basic	160		144		158		143
Diluted	Diluted	157		142		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	$	1.22	$	(2.50)	Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	Diluted earnings (loss) per share	$	1.21	$	(2.50)	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
March 31,
2021 2020
Net income (loss) $ 189 $ (357)
Other comprehensive income (loss):
Foreign currency translation adjustments 17 (41)
Net gain (loss) on pension and postretirement benefit plans 0 1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses 0 1
Total other comprehensive income (loss) before income taxes 17 (39)
Total other comprehensive income (loss) 17 (39)
Total comprehensive income (loss) 206 (396)
Comprehensive (income) loss attributable to noncontrolling interests 1 1
Comprehensive income (loss) attributable to Hertz Global $ 207 $ (395)



	Three Months Ended 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				Accumulated Other Comprehensive Income (Loss)				Treasury Stock Shares			Treasury Stock Amount			Stockholders' Equity Attributable to Hertz Global			Non- controlling Interests			Total Stockholders' Equity					Preferred Stock Shares			Preferred Stock Amount				Common Stock Shares		Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares		Treasury Stock Amount		Stockholders' Equity Attributable to Hertz Global		Non- controlling Interests		Total Stockholders' Equity
Balance as of:	Balance as of:																		Balance as of:
December 31, 2019	December 31, 2019	0	142			$	1					$	3,024			$	(967)		$	(189)			2			$	(100)		$	1,769					$	119		$	1,888	December 31, 2019	0		$	0	142		$	1	$	3,024	$	(967)	$	(189)	2		$	(100)	$	1,769	$	119	$	1,888
Net income (loss)	Net income (loss)	—	—	—				—		(356)				—				—			—			(356)			(1)			(357)			Net income (loss)		—			—				—		—		—		(356)		—		—		—		(356)		(1)		(357)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—	—				—		—				(39)				—			—			(39)			—			(39)			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)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—	—				—		—				—				—			—			—			1			1			Contributions from noncontrolling interests		—			—				—		—		—		—		—		—		—		—		1		1
March 31, 2020	March 31, 2020	0	142	$	1			$	3,022	$	(1,323)			$	(228)			2			$	(100)		$	1,372		$	119		$	1,491		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)		—			—				—		—		—		(847)		—		—		—		(847)		(5)		(852)
Other comprehensive income (loss)																																Other comprehensive income (loss)		—			—				—		—		—		—		7		—		—		7		—		7
Stock-based compensation charges																																Stock-based compensation charges		—			—				—		—		(2)		—		—		—		—		(2)		—		(2)
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

Preferred Stock
Shares Common Stock Shares Common Stock Amount Additional
Paid-In Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock Shares Treasury Stock Amount Stockholders'
Equity
Attributable to
Hertz Global Non-
controlling Interests Total Stockholders' Equity
Balance as of:
December 31, 2020 0 156 $ 2 $ 3,047 $ (2,681) $ (212) 2 $ (100) $ 56 $ 37 $ 93
Net income (loss) — — — — 190 — — — 190 (1) 189
Other comprehensive income (loss) — — — — — 17 — — 17 — 17
Stock-based compensation charges — — — 2 — — — — 2 — 2
Distributions to noncontrolling interests — — — — — — — — — (11) (11)
March 31, 2021 0 156 $ 2 $ 3,049 $ (2,491) $ (195) 2 $ (100) $ 265 $ 25 $ 290

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

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

Unaudited

(In millions)


	Mezzanine 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:
December 31, 2020	0	$	0	156	$	2	$	3,047	$	(2,681)	$	(212)	2	$	(100)	$	56	$	37	$	93
Net income (loss)	—	—		—	—		—		190		—		—	—		190		(1)		189
Other comprehensive income (loss)	—	—		—	—		—		—		17		—	—		17		—		17

Stock-based compensation charges	—	—		—	—		2		—		—		—	—		2		—		2
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—	—		—		(11)		(11)
March 31, 2021	0	0		156	2		3,049		(2,491)		(195)		2	(100)		265		25		290
Net income (loss)	—	—		—	—		—		(168)		—		—	—		(168)		(1)		(169)
Other comprehensive income (loss)	—	—		—	—		—		—		(7)		—	—		(7)		—		(7)

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

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

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)


		Three Months Ended March 31,					Six Months Ended June 30,
		2021		2020			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	189	$	(357)	Net income (loss)	$	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	275		733		Depreciation and reserves for revenue earning vehicles	420		1,393
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	54		53		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)	34		12		Amortization of deferred financing costs and debt discount (premium)	98		26

Loss on extinguishment of debt						Loss on extinguishment of debt	8		3

Provision for receivables allowance	Provision for receivables allowance	29		15		Provision for receivables allowance	64		32
Deferred income taxes, net	Deferred income taxes, net	62		(13)		Deferred income taxes, net	(16)		(205)
Technology-related intangible and other asset impairments						Technology-related intangible and other asset impairments	0		193

Non-cash reorganization items, net		(15)		0
Reorganization items, net						Reorganization items, net	314		(1)
(Gain) loss from the sale of a business	(Gain) loss from the sale of a business	(392)		0		(Gain) loss from the sale of a business	(400)		0
(Gain) loss on sale of non-vehicle capital assets	(Gain) loss on sale of non-vehicle capital assets	(1)		(21)		(Gain) loss on sale of non-vehicle capital assets	(6)		(24)

Other	Other	2		4		Other	0		(1)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(73)		226		Non-vehicle receivables	(214)		287
Prepaid expenses and other assets	Prepaid expenses and other assets	(87)		(61)		Prepaid expenses and other assets	(67)		(4)
Operating lease right-of-use assets	Operating lease right-of-use assets	78		100		Operating lease right-of-use assets	154		189
Non-vehicle accounts payable	Non-vehicle accounts payable	40		(86)		Non-vehicle accounts payable	94		168
Accrued liabilities	Accrued liabilities	62		(59)		Accrued liabilities	(11)		(61)
Accrued taxes, net	Accrued taxes, net	36		(14)		Accrued taxes, net	91		(20)
Operating lease liabilities	Operating lease liabilities	(78)		(66)		Operating lease liabilities	(160)		(195)
Self-insured liabilities	Self-insured liabilities	(15)		(17)		Self-insured liabilities	(27)		(55)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	200		449		Net cash provided by (used in) operating activities	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	(1,517)		(4,346)		Revenue earning vehicles expenditures	(4,136)		(4,956)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	686		2,212		Proceeds from disposal of revenue earning vehicles	1,199		5,005
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(9)		(59)		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	4		23		Proceeds from non-vehicle capital assets disposed of or to be disposed of	10		50
Sales of marketable securities	Sales of marketable securities	0		74		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		Proceeds from the sale of a business, net of cash sold	818		0
Other	Other	0		(1)		Other	(1)		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(18)		(2,097)		Net cash provided by (used in) investing activities	(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	1,096		3,661		Proceeds from issuance of vehicle debt	8,939		4,174
Repayments of vehicle debt	Repayments of vehicle debt	(946)		(2,538)		Repayments of vehicle debt	(8,120)		(4,613)
Proceeds from issuance of non-vehicle debt		560		1,440
Repayments of non-vehicle debt		(1)		(851)
Payment of financing costs		(7)		(9)

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

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

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Three Months Ended March 31,
		2021		2020			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	0		29
Early redemption payments						Early redemption payments	(85)		0
Contributions from (distributions to) noncontrolling interests						Contributions from (distributions to) noncontrolling interests	(15)		0
Other	Other	0		(2)		Other	0		(2)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	692		1,701		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	(12)		(4)		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	862		49		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)	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 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	$	2,440	$	1,409	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	$	69	$	103	Vehicle	$	203	$	193
Non-vehicle	Non-vehicle	30		26		Non-vehicle	158		67
Income taxes, net of refunds	Income taxes, net of refunds	(4)		5		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	$	103	$	200	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	119		1,043		Sales of revenue earning vehicles included in vehicle receivables	33		759

Purchases of non-vehicle capital assets included in accounts payable	Purchases of non-vehicle capital assets included in accounts payable	6		32		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	16		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	21		4		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 ~~are~~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)


		March 31, 2021		December 31, 2020			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,087	$	1,096	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	119		50		Vehicle	247		50
Non-vehicle	Non-vehicle	1,206		333		Non-vehicle	628		333
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	1,325		383		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	2,412		1,479		Total cash, cash equivalents, restricted cash and restricted cash equivalents	2,695		1,479
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	157		164		Vehicle	87		164
Non-vehicle, net of allowance of $56 and $46, respectively		636		613
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	793		777		Total receivables, net	1,024		777
Due from Hertz Holdings	Due from Hertz Holdings	1		1		Due from Hertz Holdings	0		1
Prepaid expenses and other assets	Prepaid expenses and other assets	785		372		Prepaid expenses and other assets	1,184		372
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	7,919		7,540		Vehicles	9,563		7,540
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,573)		(1,478)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	6,360		6,062		Total revenue earning vehicles, net	7,990		6,062
Property and equipment, net	Property and equipment, net	637		666		Property and equipment, net	618		666
Operating lease right-of-use assets	Operating lease right-of-use assets	1,580		1,675		Operating lease right-of-use assets	1,504		1,675
Intangible assets, net	Intangible assets, net	2,969		2,992		Intangible assets, net	2,947		2,992
Goodwill	Goodwill	1,045		1,045		Goodwill	1,045		1,045
Assets held for sale	Assets held for sale	0		1,811		Assets held for sale	0		1,811
Total assets(a)	Total assets(a)	$	16,582	$	16,880	Total assets(a)	$	19,007	$	16,880
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)	LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)					LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	141	$	29	Vehicle	$	93	$	29
Non-vehicle	Non-vehicle	390		389		Non-vehicle	687		389
Total accounts payable	Total accounts payable	531		418		Total accounts payable	780		418
Accrued liabilities	Accrued liabilities	825		759		Accrued liabilities	945		759
Accrued taxes, net	Accrued taxes, net	161		121		Accrued taxes, net	232		121
Debt:	Debt:					Debt:
Vehicle	Vehicle	6,286		6,024		Vehicle	7,035		6,024
Non-vehicle	Non-vehicle	740		243		Non-vehicle	1,514		243
Total debt	Total debt	7,026		6,267		Total debt	8,549		6,267
Operating lease liabilities	Operating lease liabilities	1,541		1,636		Operating lease liabilities	1,459		1,636
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	459		488
Deferred income taxes, net	Deferred income taxes, net	793		735		Deferred income taxes, net	715		735
Total liabilities not subject to compromise	Total liabilities not subject to compromise	11,347		10,424		Total liabilities not subject to compromise	13,139		10,424
Liabilities subject to compromise	Liabilities subject to compromise	5,043		5,030		Liabilities subject to compromise	0		5,030
Liabilities held for sale	Liabilities held for sale	0		1,431		Liabilities held for sale	0		1,431
Total liabilities(a)	Total liabilities(a)	16,390		16,885		Total liabilities(a)	13,139		16,885
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Stockholder's equity (deficit):	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	3,955		3,953		Additional paid-in capital	9,583		3,953

Accumulated deficit		(3,593)		(3,783)
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)	(195)		(212)		Accumulated other comprehensive income (loss)	(202)		(212)
Stockholder's equity (deficit) attributable to Hertz	Stockholder's equity (deficit) attributable to Hertz	167		(42)		Stockholder's equity (deficit) attributable to Hertz	5,849		(42)
Noncontrolling interests	Noncontrolling interests	25		37		Noncontrolling interests	19		37
Total stockholder's equity (deficit)	Total stockholder's equity (deficit)	192		(5)		Total stockholder's equity (deficit)	5,868		(5)
Total liabilities and stockholder's equity (deficit)	Total liabilities and stockholder's equity (deficit)	$	16,582	$	16,880	Total liabilities and stockholder's equity (deficit)	$	19,007	$	16,880

(a)The Hertz Corporation's consolidated total assets as of ~~March 31,~~June 30, 2021 and December 31, 2020 include total assets of VIEs of ~~$513~~$808 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of ~~March 31,~~June 30, 2021 and December 31, 2020 include total liabilities of VIEs of ~~$393~~$694 million and $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 ~~13,~~15, "Related Party Transactions," for further information.

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

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions)

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



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



	Three Months Ended 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				Accumulated Other Comprehensive Income (Loss)		Stockholder's Equity Attributable to Hertz		Noncontrolling Interests				Total Stockholder's Equity			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:	Balance as of:														Balance as of:
December 31, 2019	December 31, 2019	100			$	0					$	3,955			$	(64)							$	(1,937)				$	(189)	$	1,765	$	119	$	1,884	December 31, 2019	100			$	0		$	3,955		$	(64)		$	(1,937)		$	(189)	$	1,765	$	119	$	1,884
Net income (loss)	Net income (loss)	—	—				—		—				(355)				—		(355)		(1)				(356)		Net income (loss)	—		—		—		—				(355)			—			(355)			(1)			(356)
Due from Hertz Holdings	Due from Hertz Holdings	—	—				—		(3)				—				—		(3)		—				(3)		Due from Hertz Holdings	—		—		—		(3)				—			—			(3)			—			(3)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—				—		—				—				(39)		(39)		—				(39)		Other comprehensive income (loss)	—		—		—		—				—			(39)			(39)			—			(39)

Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—				—		—				—				—		—		1				1		Contributions from noncontrolling interests	—		—		—		—				—			—			—			1			1
March 31, 2020	March 31, 2020	100	$	0			$	3,955	$	(67)			$	(2,292)			$	(228)	$	1,368	$	119			$	1,487	March 31, 2020	100		0		3,955		(67)				(2,292)			(228)			1,368			119			1,487
Net income (loss)																											Net income (loss)	—		—		—		—				(951)			—			(951)			(5)			(956)
Due from Hertz Holdings																											Due from Hertz Holdings	—		—		—		(1)				—			—			(1)			—			(1)
Liabilities subject to compromise(2)																											Liabilities subject to compromise(2)	—		—		—		(65)				—			—			(65)			—			(65)
Write-off of intercompany loan(3)																											Write-off of intercompany loan(3)	—		—		—		133				—			—			133			—			133
Other comprehensive income (loss)																											Other comprehensive income (loss)	—		—		—		—				—			7			7			—			7
Stock-based compensation charges																											Stock-based compensation charges	—		—		(2)		—				—			—			(2)			—			(2)

June 30, 2020																											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

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

Common Stock Shares Common Stock Amount Additional
Paid-In Capital Accumulated
Deficit Accumulated
Other Comprehensive
Income (Loss) Stockholder's Equity Attributable to Hertz Noncontrolling Interests Total Stockholder's Equity (Deficit)
Balance as of:
December 31, 2020 100 $ 0 $ 3,953 $ (3,783) $ (212) $ (42) $ 37 $ (5)
Net income (loss) — — — 190 — 190 (1) 189
Other comprehensive income (loss) — — — — 17 17 — 17
Stock-based compensation charges — — 2 — — 2 — 2
Distributions to noncontrolling interests — — — — — — (11) (11)
March 31, 2021 100 $ 0 $ 3,955 $ (3,593) $ (195) $ 167 $ 25 $ 192

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 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)


		Three Months Ended March 31,					Six Months Ended June 30,
		2021		2020			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	189	$	(356)	Net income (loss)	$	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	275		733		Depreciation and reserves for revenue earning vehicles	420		1,393
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	54		53		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)	34		12		Amortization of deferred financing costs and debt discount (premium)	98		26

Loss on extinguishment of debt						Loss on extinguishment of debt	8		3

Provision for receivables allowance	Provision for receivables allowance	29		15		Provision for receivables allowance	64		32
Deferred income taxes, net	Deferred income taxes, net	62		(12)		Deferred income taxes, net	(16)		(232)
Non-cash reorganization items, net		(15)		0

Technology-related intangible and other asset impairments						Technology-related intangible and other asset impairments	0		193
Write-off of intercompany loan						Write-off of intercompany loan	0		133
Reorganization items, net						Reorganization items, net	150		(1)
(Gain) loss from the sale of a business	(Gain) loss from the sale of a business	(392)		0		(Gain) loss from the sale of a business	(400)		0
(Gain) loss on sale of non-vehicle capital assets	(Gain) loss on sale of non-vehicle capital assets	(1)		(21)		(Gain) loss on sale of non-vehicle capital assets	(6)		(24)

Other	Other	2		3		Other	0		(1)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(73)		226		Non-vehicle receivables	(214)		287
Prepaid expenses and other assets	Prepaid expenses and other assets	(87)		(61)		Prepaid expenses and other assets	(67)		(4)
Operating lease right-of-use assets	Operating lease right-of-use assets	78		100		Operating lease right-of-use assets	154		189
Non-vehicle accounts payable	Non-vehicle accounts payable	40		(86)		Non-vehicle accounts payable	94		168
Accrued liabilities	Accrued liabilities	62		(59)		Accrued liabilities	(11)		(61)
Accrued taxes, net	Accrued taxes, net	36		(14)		Accrued taxes, net	91		(20)
Operating lease liabilities	Operating lease liabilities	(78)		(66)		Operating lease liabilities	(160)		(195)
Self-insured liabilities	Self-insured liabilities	(15)		(17)		Self-insured liabilities	(27)		(55)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	200		450		Net cash provided by (used in) operating activities	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	(1,517)		(4,346)		Revenue earning vehicles expenditures	(4,136)		(4,956)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	686		2,212		Proceeds from disposal of revenue earning vehicles	1,199		5,005
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(9)		(59)		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	4		23		Proceeds from non-vehicle capital assets disposed of or to be disposed of	10		50
Sales of marketable securities	Sales of marketable securities	0		74		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		Proceeds from the sale of a business, net of cash sold	818		0
Other	Other	0		(1)		Other	(1)		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(18)		(2,097)		Net cash provided by (used in) investing activities	(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	1,096		3,661		Proceeds from issuance of vehicle debt	8,939		4,174
Repayments of vehicle debt		(946)		(2,538)
Proceeds from issuance of non-vehicle debt		560		1,440
Repayments of non-vehicle debt		(1)		(851)
Payment of financing costs		(7)		(9)
Advances to Hertz Holdings		0		(3)

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

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTOR-IN-POSSESSION)~~

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Three Months Ended March 31,
		2021		2020			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	(151)		(11)
Contributions from Hertz Holdings						Contributions from Hertz Holdings	5,638		0
Advances to Hertz Holdings						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	(10)		0		Contributions from (distributions to) noncontrolling interests	(15)		0

Other						Other	0		(1)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	692		1,700		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	(12)		(4)		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	862		49		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)	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 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	$	2,412	$	1,409	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	$	69	$	103	Vehicle	$	203	$	193
Non-vehicle	Non-vehicle	30		26		Non-vehicle	158		67
Income taxes, net of refunds	Income taxes, net of refunds	(4)		5		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	$	103	$	200	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	119		1,043		Sales of revenue earning vehicles included in vehicle receivables	33		759

Purchases of non-vehicle capital assets included in accounts payable	Purchases of non-vehicle capital assets included in accounts payable	6		32		Purchases of non-vehicle capital assets included in accounts payable	24		4
Revenue earning vehicles and non-vehicle capital assets acquired through capital leases		21		4
Purchases of non-vehicle capital assets included in liabilities subject to compromise	Purchases of non-vehicle capital assets included in liabilities subject to compromise	16		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 ~~are~~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" 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. The Company also sells vehicles through Hertz Car Sales and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. As disclosed in Note 3, "Divestitures," on March 30, 2021 the Company completed the previously announced sale of substantially all of the assets and certain liabilities of its Donlen subsidiary (the "Donlen Sale"), a business which ~~provides~~provided vehicle leasing and fleet management services.

~~Voluntary Petitions for Bankruptcy~~Chapter 11 and Emergence

In March 2020, the World Health Organization declared COVID-19 a global pandemic. In response to COVID-19, local and national governments around the world instituted shelter-in-place and similar orders and travel restrictions, and airline and other travel decreased suddenly and dramatically. As a result of the impact of COVID-19 and the associated government responses on travel demand, late in the first quarter of 2020, the Company experienced a high level of rental cancellations and a significant decline in forward bookings. In response, the Company began aggressive actions to eliminate costs. However, it faced significant ongoing ~~expenses.~~expenses, including a large lease payment with respect to its vehicle fleet that increased as a result of COVID-19's impact on the car market.

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 Hertz Corporation, et al., Case No. 20-11218 (MFW).

~~The~~ On May 14, 2021, the Debtors filed ~~with~~ the ~~Bankruptcy Court a proposed Joint Chapter 11 Plan of Reorganization~~solicitation version of the ~~Debtors, dated as of March 1, 2021, and a related proposed Disclosure Statement. The Debtors subsequently filed with the Bankruptcy Court a proposed~~ First Modified Third Amended Joint Chapter 11 Plan of Reorganization of the Debtors ~~and a related proposed Disclosure Statement,~~(as amended, supplemented or otherwise modified in ~~each case dated as~~accordance with its terms, the "Plan of March 29, 2021; a proposed Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 3, 2021; a proposed Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 10, 2021; a proposed Second Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, dated as of April 14, 2021 and April 15, 2021, respectively; a proposed Third Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 16, 2021; and a proposed Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 21, 2021, which Disclosure Statement the Debtors further updated on April 21, 2021. On April 22, 2021, the Debtors filed the solicitation version of the Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors (the "Proposed Plan"Reorganization"), and the solicitation version of the Supplement to the Disclosure Statement ~~(the~~which was approved by the Bankruptcy Court 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").

~~The Disclosure Statement describes, among other things,~~On the events leading to the Chapter 11 Cases; the Debtors contemplated financial restructuring (the “Restructuring”); the proposed plan of reorganization; certain events that have occurred or are anticipated to occur during the Chapter 11 Cases, including the solicitation of votes to approve the Proposed Plan from certainEffective Date, as a result of the ~~Debtors’ stakeholders; certain risk factors related to~~Plan of Reorganization, the ~~Plan, certain tax considerations,~~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 ~~aspects~~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 ~~Restructuring. The Disclosure Statement~~Company's Senior Notes and ~~solicitation~~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");

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

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

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

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

•~~the Proposed Plan will raise approximately $3.9~~$1.5 billion ~~in cash proceeds, comprised of:~~

◦~~$565 million from the purchase of common~~(less a 2% upfront discount and stock ~~in the reorganized entity by the Plan Sponsors;~~

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

◦~~$385 million~~issuance fees) from the purchase of preferred stock of reorganized Hertz Global by ~~plan sponsors Centerbridge Partners, L.P. and Warburg Pincus LLC;~~Apollo; and

◦•$~~1.3~~1.5 billion in proceeds from the Company's ~~anticipated new~~secured exit term loan ~~facility.~~facilities.

•

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

◦•the holders of administrative, priority and secured claims ~~will be paid~~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 ~~will be paid~~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 ~~will receive approximately 48.2%~~received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the ~~equity~~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 ~~reorganized entity~~Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and ~~the right to purchase an additional $1.6 billion of equity in the reorganized entity;~~

◦•the holders of general unsecured claims will receive payment in cash ~~payments~~in full plus interest at the federal judgment rate from the Petition Date to the date of ~~not more than $550 million~~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"), for in the aggregate ~~which~~of up to 18% of reorganized Hertz Global common stock issued and outstanding on the ~~Company estimates will provide a recovery of approximately 100 percent;~~Effective Date, subject to dilution and

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

In ~~light~~accordance with the Plan of ~~continuing interest from an alternative potential plan sponsorship group, consisting~~Reorganization, Hertz Global commenced a Rights Offering, under which eligible holders of ~~Certares Opportunities LLC (“Certares”), Knighthead Capital Management, LLC (“Knighthead”), Apollo Capital Management, LP (“Apollo”),~~Hertz Global's common stock and certain eligible holders of ~~each~~the Company's Senior Notes and lenders under the Alternative Letter of their affiliates (together with Certares, Knighthead, and Apollo the “Alternative Sponsor Group”), on April 28, 2021, the Bankruptcy Court entered an order (the “Bid Procedures Order”), among other things, establishing bidding and auction procedures relatingCredit Facility could purchase up to $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. Pursuant to the ~~submission~~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 June 30, 2021. Pursuant to the terms of ~~alternative plan proposals.~~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 the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock to 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 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 conditions. The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which 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

~~On May 2, 2021,~~all unexercised Public Warrants will expire and the ~~Alternative Sponsor Group submitted~~rights of the holders of such expired Public Warrants will terminate. The Public Warrants have an ~~alternative plan proposal~~initial exercise price of $13.80 and are subject to adjustment from time to time upon the ~~Debtors (the “Alternative Plan Proposal”).~~occurrence of any payments of cash dividends and certain dilutive events.

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

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

~~Debtors-In-Possession~~

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

~~Automatic Stay~~

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

~~Potential Claims~~

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith. These schedules and statements may be subject to further amendment or modification after filing. As part of the ChapterNote 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"Public Warrants – Hertz Global," for ~~general claims, which was on October 21, 2020 (the “Bar Date”).~~

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

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~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

~~time to complete and likely will continue after the Debtors emerge from bankruptcy. For~~ additional information on the ~~anticipated claims settlement process, please refer to~~new equity and Public Warrants issued upon the ~~Disclosure Statement.~~Company's Chapter 11 emergence.

~~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 manufacturer rebates, as of March 31, 2021 and ongoing vehicle sales must be applied to vehicle debt in amortization.~~

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

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

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

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

~~In the first quarter of 2021, the Bankruptcy Court authorized the rejection of certain unexpired leases (the "Lease Rejection Orders")~~$2.8 billion comprised of ~~278 off airport and 26 airport locations~~senior secured term loan facilities in ~~the Company's U.S. RAC segment. See Note 7, "Leases," for further details.~~

~~Table~~an aggregate principal amount of ~~Contents~~

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

~~On April 15, 2021, the Company obtained commitments with respect to~~$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 ~~$1.5~~$2.8 billion and ~~a senior~~medium term ~~loan facility~~notes in an aggregate principal amount of ~~$1.3~~$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," for additional information.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. ~~The~~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 unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unableCompany'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.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 ~~March 31,~~June 30, 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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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 unaudited condensed consolidated balance sheet as of December 31, 2020 and the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2021(“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 ~~sheets~~sheet as of ~~March 31, 2021 and~~ 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 ~~15,~~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 three and six months ended ~~March 31, 2021.~~June 30, 2021 and 2020, respectively. See Note ~~16,~~18, "Reorganization Items, Net," for additional information.

18Under 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.

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

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

The December 31, 2020 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, 2020 (the "2020 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") on February 26, 2021.

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

Not Yet Adopted

Scope of Reference Rate Reform

In January 2021, the Financial Accounting Standards Board ("FASB") issued guidance that clarifies that entities with derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment due to reference rate reform may elect to apply certain optional expedients and exceptions, including contract modification relief, provided in Topic 848. Entities may elect to apply the guidance on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 or (2)

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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 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 ~~$392~~$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 ~~$45~~$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 March 31, 2021. The proceeds from the sale are subject to certain post-closing adjustments based on the level of assumed indebtedness, working capital and fleet equity which the Company expects to be finalized during the second quarter ofJune 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.

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

Sale of Non-vehicle Capital Assets

During the first quarter of 2020, the Company received additional cash from the sale of certain non-vehicle capital assets in its ~~U.S.~~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 ~~three~~six months ended ~~March 31,~~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 ~~three~~six months ended ~~March 31,~~June 30, 2020.

Note 4—Revenue Earning Vehicles

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


(In millions)	(In millions)	March 31, 2021		December 31, 2020		(In millions)	June 30, 2021		December 31, 2020
Revenue earning vehicles	Revenue earning vehicles	$	7,800	$	7,492	Revenue earning vehicles	$	9,413	$	7,492
Less accumulated depreciation	Less accumulated depreciation	(1,520)		(1,467)		Less accumulated depreciation	(1,525)		(1,467)
		6,280		6,025			7,888		6,025
Revenue earning vehicles held for sale, net(1)	Revenue earning vehicles held for sale, net(1)	80		37		Revenue earning vehicles held for sale, net(1)	102		37
Revenue earning vehicles, net	Revenue earning vehicles, net	$	6,360	$	6,062	Revenue earning vehicles, net	$	7,990	$	6,062

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

Note 5—Goodwill and Intangible Assets, Net

Recoverability of Goodwill and Indefinite-lived Intangible Assets

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 ASC 350 – Intangibles, Goodwill and Other (“Topic 350”).

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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. The quantitative fair value test utilized the Company's most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 1% and a range of discount rates between 13% and 15%. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million.

As 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 March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in ~~Accounting Standards Codification~~Topic 350, ~~– Intangibles, Goodwill and Other (“ASC 350”),~~ the Company concluded there were no indicators of impairment triggered for the ~~U.S.~~Americas RAC ~~segment~~or International RAC segments in the ~~first~~second quarter of 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 the Company's expected timing of emergence from bankruptcy,~~ market events or conditions, including the impact of COVID-19 on the Company's business and the travel industry, and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital. If the Company's expectations of the operating results, both in magnitude or

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

timing, do not materialize, or if its weighted average cost 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	Facility	Weighted-Average Interest Rate as of March 31, 2021	Fixed or Floating Interest Rate	Maturity	March 31, 2021		December 31, 2020		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	Non-Vehicle Debt								Non-Vehicle Debt

Term B Loan									Term B Loan	4.00%	Floating	6/2028	$	1,300	$	0
Term C Loan									Term C Loan	4.00%	Floating	6/2028	245		0
First Lien RCF									First Lien RCF	N/A	Floating	6/2026	0		0
Other Non-Vehicle Debt									Other Non-Vehicle Debt	8.60%	Fixed	Various	15		18
Senior Secured Superpriority Debtor-in-Possession Credit Agreement	Senior Secured Superpriority Debtor-in-Possession Credit Agreement	8.25%	Floating	12/2021	$	750	$	250	Senior Secured Superpriority Debtor-in-Possession Credit Agreement	N/A	N/A	N/A	0		250
Other Non-Vehicle Debt		8.25%	Fixed	Various	16		18
Unamortized Debt Issuance Costs and Net (Discount) Premium	Unamortized Debt Issuance Costs and Net (Discount) Premium				(26)		(25)		Unamortized Debt Issuance Costs and Net (Discount) Premium				(46)		(25)
Total Non-Vehicle Debt Not Subject to Compromise	Total Non-Vehicle Debt Not Subject to Compromise				740		243		Total Non-Vehicle Debt Not Subject to Compromise				1,514		243
Non-Vehicle Debt Subject to Compromise	Non-Vehicle Debt Subject to Compromise								Non-Vehicle Debt Subject to Compromise
Senior Term Loan	Senior Term Loan	3.50%	Floating	6/2023	656		656		Senior Term Loan	N/A	N/A	N/A	0		656
Senior RCF	Senior RCF	3.38%	Floating	6/2021	615		615		Senior RCF	N/A	N/A	N/A	0		615
Senior Notes(1)	Senior Notes(1)	6.11%	Fixed	10/2022-1/2028	2,700		2,700		Senior Notes(1)	N/A	N/A	N/A	0		2,700
Senior Second Priority Secured Notes	Senior Second Priority Secured Notes	7.63%	Fixed	6/2022	350		350		Senior Second Priority Secured Notes	N/A	N/A	N/A	0		350
Promissory Notes	Promissory Notes	7.00%	Fixed	1/2028	27		27		Promissory Notes	N/A	N/A	N/A	0		27
Alternative Letter of Credit Facility(2)	Alternative Letter of Credit Facility(2)	5.25%	Floating	11/2023	142		114		Alternative Letter of Credit Facility(2)	N/A	N/A	N/A	0		114
Senior RCF Letter of Credit Facility	Senior RCF Letter of Credit Facility	5.50%	Floating	6/2021	34		17		Senior RCF Letter of Credit Facility	N/A	N/A	N/A	0		17
Letter of Credit Facility		5.50%	Floating	6/2021	23		0

Unamortized Debt Issuance Costs and Net (Discount) Premium	Unamortized Debt Issuance Costs and Net (Discount) Premium				(36)		(36)		Unamortized Debt Issuance Costs and Net (Discount) Premium				0		(36)
Total Non-Vehicle Debt Subject to Compromise					4,511		4,443
Vehicle Debt
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(3)(4)		3.41%	Floating	3/2022	1,665		1,940
					1,665		1,940
HVF II U.S. Vehicle Medium Term Notes

HVF II Series 2015-3(4)		3.78%	Fixed	9/2020	144		163
HVF II Series 2016-2(4)		4.12%	Fixed	3/2021	232		263
HVF II Series 2016-4(4)		3.78%	Fixed	7/2021	165		187
HVF II Series 2017-1(4)		4.03%	Fixed	10/2020	176		199
HVF II Series 2017-2(4)		4.45%	Fixed	10/2022	145		164
HVF II Series 2018-1(4)		3.93%	Fixed	2/2023	414		468
HVF II Series 2018-2(4)		4.40%	Fixed	6/2021	84		94
HVF II Series 2018-3(4)		4.69%	Fixed	7/2023	84		95

2119

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

Unaudited



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

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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

(1)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 sheets as of ~~March 31, 2021 and~~ 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 March 31, 2021 December 31, 2020
6.250% Senior Notes due October 2022 $ 500 $ 500
5.500% Senior Notes due October 2024 800 800
7.125% Senior Notes due August 2026 500 500
6.000% Senior Notes due January 2028 900 900
$ 2,700 $ 2,700


(In millions)	Outstanding Principal

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.~~interest as of December 31, 2020.

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

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

(4)Includes default interest as of December 31, 2020, which is comprised of an increase in ~~an amortization event, as described below,~~ the ~~expected maturity will deviate from its stated,~~ contractual maturity date during amortization as payoff is based on the sale of the underlying vehicles and the pro-rata application of those proceeds across all outstanding HVF II Series of Notes in accordance with their seniority. During the amortization event, the ultimate maturity of the notes will depend upon the length of time the underlying vehicle collateral is sold or the timing of the refinancing of the notes.spread.

~~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~~

(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 at a rate of ~~1.18 to 1 and~~ 1.22 to 1 as of ~~March 31, 2021 and~~ December 31, ~~2020, 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	March 31, 2021		December 31, 2020		European Vehicle Notes	June 30, 2021		December 31, 2020
4.125% Senior Notes due October 2021	4.125% Senior Notes due October 2021	$	265	$	276	4.125% Senior Notes due October 2021	$	0	$	276
5.500% Senior Notes due March 2023	5.500% Senior Notes due March 2023	588		612		5.500% Senior Notes due March 2023	0		612
		$	853	$	888		$	0	$	888

Chapter 11 and 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 sheets as of ~~March 31, 2021, and~~ December 31, 2020. The Company has suspended accruing and paying interest and amortizing deferred financing costs, discounts and premiums, as applicable, on the Senior Notes, Promissory Notes and Alternative Letter of Credit Facility, as of the Petition Date. The Company is continuing to pay in cash an amount equal to the monthly interest at the non-default rate for the Senior Term Loan and Senior RCF (collectively, "the First Lien Facilities"), and has suspended amortizing the associated deferred financing costs, discounts and premiums for the First Lien Facilities, as applicable, as of the Petition Date. Additionally, the Company is continuing to pay half of the interest at the non-default rate for the Senior Second Priority Secured Notes with the remaining half paid in kind.

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility. Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited ("HIL"), 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, and (ii) HVF, HVF II and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

As disclosed in Note 1, "Background," ~~based~~ on May 14, 2021, the ~~Proposed~~Debtors filed the Plan of Reorganization with the ~~Disclosure Statement and commitments received by the Company in April 2021, all of~~Bankruptcy Court, which ~~are subject to approval~~was confirmed by the Bankruptcy Court ~~and certain other conditions, events related to~~on June 10, 2021. On the ~~Company's debt are as follows:~~

•~~Upon exit~~Effective Date, the Company emerged from Chapter 11 ~~which is currently anticipated to occur~~as disclosed in ~~June 2021,~~Note 1, "Background" and, in accordance with the ~~Debtors anticipate eliminating approximately $5.0 billion~~Plan of Reorganization, substantially all existing non-vehicle debt and ~~eliminating~~all existing ABS facilities under the ~~€725 million European Vehicle Notes where~~HVF II U.S. ABS Program and the ~~holders' guaranty claims against~~HVIF U.S. ABS Program were repaid in full and cancelled, as further disclosed below. Upon the ~~Debtors' U.S. entities will be unimpaired as~~Debtor's emergence from Chapter 11 and the ~~balance~~associated debt payoffs, any events of ~~their debt is expected~~default, termination and/or amortization events ceased to ~~be paid by the issuer, Hertz Holdings Netherlands BV.~~

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

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

2321

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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

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")

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

~~Vehicle Debt~~

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

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

~~Vehicle Debt-Other~~

~~European Vehicle~~Senior Notes and Senior Second Priority Secured Notes

~~Hertz Netherlands and certain other international subsidiaries entered into a limited forbearance and lock-up agreement (the “Lock-up Agreement”), as extended,~~On the Effective Date, in ~~respect~~accordance with the Plan of Reorganization, the European Vehicle Notes pursuant to which the majority noteholders agreed not to take action in respect of any default or event of default that could have resulted from the Chapter 11 Cases, in order to support a transaction set-forth in the Lock-up Agreement, and to be implemented by a scheme of arrangement (subject to conditions and approvals), subsequent to the waiver expiration on December 31, 2020. The transaction set out in the Lock-up Agreement was superseded by positive developments in the Chapter 11 Cases in April 2021 in which the Proposed Plan will both fully repay the European VehicleCompany's Senior Notes and ~~also provide~~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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Promissory Notes

On the ~~necessary liquidity for~~Effective Date, in accordance with the ~~European business.~~ Plan of Reorganization, the Promissory Notes were paid in full and terminated.

Alternative Letter of Credit Facility

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 ~~23,~~ 2021, Hertz International Limited ("HIL") entered into a multi-draw term loan facility (the "HIL Credit Agreement") which ~~provides~~provided an aggregate maximum principal of €250 million to meet the liquidity requirements of the European business. As

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 certain of the Plan Sponsors. On the Effective Date, in accordance with the Plan of Reorganization, the Second HIL Credit Agreement was paid in full and terminated.

Vehicle Debt

HVF III U.S. ABS Program

In June 2021, Hertz established a securitization platform, the HVF III 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 III Series 2021-A Notes: In June 2021, Hertz issued the Series 2021-A Notes with a maximum principal amount of up to $2.8 billion and a maturity date of June 2023.

HVF III Series 2021-1 Notes: On the Effective Date, Hertz issued the Series 2021-1 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 2021-1 Notes based on 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

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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 ~~Lock-Up Agreement has been terminated~~termination of the notes.

HVIF U.S. ABS Program

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

Vehicle Debt-Other

European Vehicle Notes

On the ~~scheme arrangement has been cancelled.~~Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were paid in full and terminated.

European ABS

~~An amortization event, that would have arisen under the European ABS as a result of filing the Chapter 11 Cases, was waived in May 2020 (as amended from time to time) and, in~~In April 2021, ~~such waivers have been superseded by~~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 and, in respect~~2022. In accordance with the Plan of Reorganization, the guarantees given by Hertz relating to ~~these facilities,~~ the ~~terms~~restructured European ABS, including all contingent claims in respect of such guarantees, were fully released on the ~~restructuring also acknowledge that the Proposed Plan will provide for a complete release of any contingent claims.~~Effective Date.

Hertz Canadian Securitization

On January ~~13,~~27, 2021, ~~the Bankruptcy Court~~TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered ~~an order authorizing~~into the ~~Debtors to enter into a new series under the Hertz Canadian Securitization,~~ Funding LP Series 2021-A ~~Notes. On January 27, 2021, Funding LP entered into~~which provides for aggregate maximum borrowings of CAD$350 million on a revolving ~~basis, subject~~basis. Subject to initial availability, ~~under~~ the ~~borrowing base limitation. 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 was waived in May 2020, and, in June 2021, such waiver has been superseded by an amendment of the 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

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

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.

New Zealand RCF

In May 2021, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to provide aggregate maximum borrowings of NZD$60 million and to extend the maturity to June 2022.

U.K. Financing Facility

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 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 and, in respect~~2022. In accordance with the Plan of ~~the~~Reorganization, guarantees given by Hertz relating to ~~these facilities,~~ the ~~terms~~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 the U.K. Toyota Financing Facility to finance the acquisition of certain motor vehicles which provides for aggregate maximum borrowings of £10 million maturing in December 2021.

Maturities

As of June 30, 2021, the nominal amounts of maturities of debt for each of the ~~restructuring also acknowledge that~~years ending December 31 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 ~~Proposed Plan will provide~~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 the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements. Loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the table below, in the accompanying unaudited condensed consolidated statements of operations for ~~a complete release~~the three and six months ended June 30, 2021.

Table of ~~any contingent claims.~~Contents

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 credit ~~facilities. As a result of the filing of the Chapter 11 Cases, almost all of the Company's revolving credit~~ facilities, ~~were terminated, as disclosed in the following table. The remaining revolving credit facilities~~which are a combination of 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).

~~The following facilities were available to the Company as of March 31, 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
Senior Secured Superpriority Debtor-in-Possession Credit Agreement 900 900
Letter of Credit Facility(1)
0 0
Alternative Letter of Credit Facility(1)
0 0
Total Non-Vehicle Debt 900 900
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes(1)
0 0
HVIF Series 2020-1 3,119 35
European ABS 494 4
Hertz Canadian Securitization 183 0
Australian Securitization 62 4
U.K. Financing Facility 19 0
New Zealand RCF 21 0
Total Vehicle Debt 3,898 43
Total $ 4,798 $ 943

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

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Unaudited

The following facilities were available to the Company as of June 30, 2021 and are presented net of any outstanding letters of credit:



(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 ~~March 31, 2021,~~the Effective Date, there were outstanding standby letters of credit totaling ~~$688 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, $278 million were issued under the Letter of Credit Facility, $194 million were issued under the Senior RCF and $200 million were issued under the Alternative Letter of Credit Facility. As of ~~March 31,~~June 30, 2021, ~~$142 million, $34 million and $23 million~~none of the issued letters of credit have been drawn upon under the Alternative Letter of Credit Facility, Senior RCF and Letter of Credit Facility, respectively, to primarily fund interest payments due under the HVF II Notes and concession payments. The draws remain unreimbursed by the Company, and, except as otherwise set forth in orders from the Bankruptcy Court, the interest on the Senior RCF and Letter of Credit Facility draws are being paid on a monthly basis at a non-default rate, and interest on the Alternative Letter of Credit Facility draws are not being paid or accrued.upon.

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

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

The Company has a 25% ownership interest in IFF No. 2, whose sole purpose is to provide commitments to lend in various currencies subject to borrowing bases comprised of revenue earning vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries. IFF No. 2 is a VIE and the Company is the primary beneficiary; therefore,

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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 ~~March 31,~~June 30, 2021 and December 31, 2020, IFF No. 2 had total assets of ~~$393~~$692 million and $464 million, respectively, comprised primarily ~~comprised~~ of loans receivable, and total liabilities of ~~$393~~$691 million and $464 million, respectively, comprised primarily ~~comprised~~ of debt.

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, 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, the Letter of Credit Facility~~first and ~~the Alternative Letter of Credit Facility, as~~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, the Company is currently in default under its Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, and the Company is in breach~~calendar year. Both of the ~~Leverage Ratio.~~financial covenants disclosed above are effective beginning in the third quarter of 2021.

~~The DIP~~In addition to financial covenants, the First Lien Credit Agreement ~~requires a liquidity~~contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, conduct of business, maintenance ~~test~~ of ~~$275 million, as defined in~~property and insurance, compliance with environmental laws and the ~~DIP~~granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement asalso contains customary negative covenants, including, among other things, the incurrence of ~~each month end period. As of March 31, 2021, Hertz was in compliance with the liquidity maintenance test.~~liens, indebtedness, asset dispositions and 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

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~~Unaudited~~

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

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

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

In the first ~~quarter~~half of 2021, the Bankruptcy Court 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~~ applied, in the aggregate, to 278 off airport and 2634 airport locations in the Company's ~~U.S.~~Americas RAC segment.

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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 March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2021		2020			(In millions)	2021		2020		2021		2020
Operating lease income from vehicle rentals	Operating lease income from vehicle rentals	$	1,099	$	1,637		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	149		169			Operating lease income from fleet leasing	0		161		149		330
Variable operating lease income	Variable operating lease income	1		33			Variable operating lease income	39		1		40		34
Revenue accounted for under Topic 842	Revenue accounted for under Topic 842	1,249		1,839			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	40		84			Revenue accounted for under Topic 606	36		66		76		150
Total revenues	Total revenues	$	1,289	$	1,923		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. The Company accrued charges of $7 million for termination benefits at March 31, 2021, which were recorded in selling, general~~employees and ~~administrative expenses~~ in the ~~accompanying unaudited condensed consolidated statement~~second quarter of ~~operations for three months ended March 31, 2021.~~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 Americas Rental Car segment and corporate operations. This program was substantially completed in the third quarter of 2020.

Restructuring Charges

Restructuring charges under these programs were as follows:



	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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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 in the accompanying unaudited condensed consolidated balance sheets.


(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 December 31, 2020, which were reinstated to accrued liabilities in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2021. See Note 17, "Liabilities Subject to 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, temporary enhanced net operating loss ("NOL") utilization rules and a temporary increase to the interest deduction limitation. The Company has considered the income tax provisions of the CARES Act in the tax benefit calculations for the three months ended March 31, 2021 and 2020 as well the amounts reported for income taxes on the unaudited condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020. The Company continues to monitor global legislation issued in response to COVID-19.

Hertz Global

The effective tax rate is ~~29%~~22% and 1%18% for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The effective tax rate is ~~impacted~~63% and ~~differs from~~14% for the ~~U.S. federal statutory rate of 21% as a result of the level~~six months ended June 30, 2021 and ~~mix of earnings among tax jurisdiction and valuation allowances in certain jurisdictions.~~2020, respectively.

Hertz Global recorded a tax benefit of $46 million and a tax provision of ~~$79~~$33 million for the three and six months ended ~~March 31,~~June 30, 2021, respectively, compared to a tax benefit of $4$192 million and $196 million for the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively. The increases in the effective tax ~~provision~~rate and tax expense for the three and six months ended ~~March 31,~~June 30, 2021 ~~compared to~~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 ~~benefit for the 2020 period is primarily due to the gain on the Donlen Sale as disclosed in Note 3, "Divestitures."~~benefits associated with European restructuring initiatives.

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Hertz

The effective tax rate is ~~29%~~90% and 1%19% for the three months ended ~~March 31,~~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 ~~impacted~~15% for the six months ended June 30, 2021 and ~~differs from the U.S. federal statutory rate of 21% as a result of the level and mix of earnings among tax jurisdiction and valuation allowances in certain jurisdictions.~~

2020, respectively. Hertz recorded a tax provision of ~~$79~~$33 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 compared to a tax benefit of $3$224 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. The tax ~~benefit for~~provision in the ~~three~~six months ended ~~March 31,~~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 ~~benefit for the 2020 period is primarily to the gain on the Donlen Sale as disclosed in Note 3, "Divestitures."~~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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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

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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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 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

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.

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Unaudited

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


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	(In millions, except per share data)	2021		2020			(In millions, except per share data)	2021		2020		2021		2020
Numerator:	Numerator:						Numerator:
Net income (loss) attributable to Hertz Global	Net income (loss) attributable to Hertz Global	$	190	$	(356)		Net income (loss) attributable to Hertz Global	$	(168)	$	(847)	$	21	$	(1,203)
Denominator:	Denominator:						Denominator:

Basic weighted-average shares outstanding	Basic weighted-average shares outstanding	156		142			Basic weighted-average shares outstanding	160		144		158		143
Dilutive stock options, RSUs and PSUs	Dilutive stock options, RSUs and PSUs	1		0			Dilutive stock options, RSUs and PSUs	0		0		0		0
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding	157		142			Diluted weighted-average shares outstanding	160		144		158		143
Antidilutive stock options, RSUs, PSUs and PSAs	Antidilutive stock options, RSUs, PSUs and PSAs	1		2			Antidilutive stock options, RSUs, PSUs and PSAs	1		2		1		2
Earnings (loss) per share:	Earnings (loss) per share:						Earnings (loss) per share:
Basic earnings (loss) per share	Basic earnings (loss) per share	$	1.22	$	(2.50)		Basic earnings (loss) per share	$	(1.05)	$	(5.86)	$	0.13	$	(8.39)
Diluted earnings (loss) per share	Diluted earnings (loss) per share	$	1.21	$	(2.50)		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 ~~11—~~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

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

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

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

Fair Value Disclosures

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

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

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

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

~~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~~

Debt Obligations

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

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



	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 ~~March 31, 2021 and~~ December 31, 2020. See Note 6, "Debt."

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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 inon 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 ~~12—~~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 ~~March 31,~~June 30, 2021 and December 31, 2020, the Company's liability recorded for self-insured liabilities is ~~$470~~$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, ~~and~~ 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 ~~March 31,~~June 30, 2021 or the period after ~~March 31,~~June 30, 2021, but before the filing of this Quarterly Report on Form 10-Q.

~~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~~

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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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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.

~~In addition~~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 ~~matters described above,~~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 ~~other~~ potential violations of laws and regulations applicable to the Company. When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate.

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

~~Other Proceedings~~Hertz Global

~~Litigation Against Former Executives~~ - The ~~Company filed litigation~~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 ~~U.S. District Court~~effective tax rate and tax expense for the ~~District~~three and six months ended June 30, 2021 are driven by the changes in Hertz Global's financial performance, changes in the earnings of ~~New Jersey against Mark Frissora, Elyse Douglas~~loss jurisdictions for which no tax benefit can be recognized and ~~John Jefferey Zimmerman on March 25, 2019,~~non-deductible reorganization costs, partially offset by the tax benefits associated with European restructuring initiatives.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 ~~state court~~the tax benefit in ~~Florida against Scott Sider on March 28, 2019,~~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 ~~whom~~Hertz Global's existing authorized, issued, and outstanding common and preferred stock 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 costscancelled. As of the ~~SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving~~Effective Date, there are 1,000,000,000 shares of reorganized Hertz Global common stock authorized for issuance. On 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 proceedingsEffective Date, in accordance with ~~its clawback policy~~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 ~~contractual rights.~~

•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, ~~are currently involved in motion practice~~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 ~~New Jersey action~~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 ~~discovery and depositions have commenced~~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 ~~Florida action. In~~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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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas. In September and October 2020, the judge in the New Jersey action entered orders requiring the parties and applicable insurers to attend and participate in mediation. The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020. The mediation was unsuccessful, but settlement discussions continued and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider. Depositions are continuing in the New Jersey action. 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~~Rights Offering

In accordance with the ~~ordinary course~~Plan 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~~Reorganization, approximately 35% of ~~a business. These indemnification obligations might include claims relating~~reorganized Hertz Global common stock was offered pursuant to the ~~following: environmental matters; intellectual property rights; governmental regulations~~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 ~~employment-related matters; customer, supplier~~second, if not fully subscribed 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 andfunded by Eligible Existing Shareholders, to certain eligible holders of the Company's ~~stockholders~~Senior Notes and ~~their affiliates~~lenders under the Alternative Letter of Credit Facility, pursuant to ~~which~~certain subscription procedures. The final expiration date for the Rights Offering occurred on June 15, 2021. Hertz ~~Holdings and~~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 will indemnify those entities and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising outGlobal common stock for gross proceeds 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.approximately $1.3 billion. 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 termsunsubscribed portion of the ~~contract or~~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 ~~third-party claim.~~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

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 ~~Spin-Off (as defined~~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 ~~2019 Form 10-K),~~discretion, it may redeem some or all of the ~~Company executed an agreement with Herc Holdings that contains mutual indemnification clauses~~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 ~~customary indemnification provision~~multiple on invested capital of 1.30x with respect to ~~liability arising out~~the shares being redeemed). As no one person or entity controls the voting stock of ~~or resulting from assumed legal matters. The Company regularly evaluates~~reorganized Hertz Global, a potential change-in-control action could be outside the ~~probability~~Company's control and result in a non-compliance event, which could then result in a mandatory redemption of ~~having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable.~~

~~Note 13—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~~all outstanding shares of ~~$425 million with an expiration in June 2020 (the "2019 Master Loan"). The interest rate was based~~Series A Preferred Stock. Accordingly, the Series A Preferred Stock is classified as mezzanine equity at its redemption amount 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 accompanyingCompany's unaudited condensed consolidated balance ~~sheets of Hertz~~sheet as of ~~March 31, 2021 and December 31, 2020. See Note 15, "Liabilities Subject to Compromise."~~June 30, 2021.

~~On May 23, 2020,~~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 ~~entered into~~Global. In the event of a ~~new master loan agreement with~~voluntary or involuntary liquidation of Hertz ~~Holdings~~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 ~~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 March 31, 2021 and December 31, 2020, there was $1 million, respectively, outstanding under the New Loan.~~

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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

~~767 Auto Leasing LLC~~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.

Registration Status of Common Stock and Series A Preferred Stock

Open Market Sale Agreement

In ~~January 2018,~~June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into ~~a Master Motor Vehicle Lease~~an open market sale agreement under which it could offer and ~~Management Agreement (the “767 Lease Agreement”) pursuant~~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 ~~Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated~~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 ~~Icahn Group, a related party during the first quarter~~Plan of ~~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~~Reorganization, all shares that had been issued under the ~~767 Lease Agreement or from third parties, under a mutually developed fleet plan and~~ATM Program were cancelled. Additionally, on the Effective Date, Hertz ~~manages, services, repairs, sells and maintains those leased vehicles on behalf~~Global contributed the $28 million of ~~767.~~net proceeds to Hertz ~~currently rents~~which was recorded in additional paid-in capital in the ~~leased vehicles to drivers~~accompanying unaudited condensed consolidated balance sheet of ~~transportation network companies ("TNC") from rental counters within locations leased or owned by affiliates~~Hertz as 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. June 30, 2021.

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 CompanyBasic earnings (loss) per share 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 14—Segment Information~~

~~The Company’s chief operating decision maker assesses performance and allocates resources~~been computed based upon the ~~financial information for~~weighted-average number of common shares outstanding. Diluted earnings (loss) per share has been computed based upon the ~~Company’s operating segments. The Company aggregates certain~~weighted-average number of ~~its operating segments into its reportable segments. The Company has identified 3 reportable segments, which are organized based on~~common shares outstanding plus the ~~products and services provided by its operating segments and~~effect of all potentially dilutive common stock equivalents, except when the ~~geographic areas in which its operating segments conduct business, as follows:~~

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

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

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.anti-dilutive.

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~~(DEBTORS-IN-POSSESSION)~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

The following ~~tables provide significant statements~~table sets forth the computation of ~~operations~~basic 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.~~diluted earnings (loss) per share:

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



	Three Months Ended 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)

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

Note ~~3, "Divestitures."~~

(2) The decrease in depreciation of revenue earning vehicles and lease charges is due to the suspension of depreciation for the Donlen business while classified as held for sale, prior to closing on March 30, 2021 as disclosed in Note 3, "Divestitures."11—Public Warrants – Hertz Global

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

~~(1) Substantially all~~The Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of ~~this reportable segment is comprised~~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 ~~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~~Public Warrants meet the definition of ~~Donlen's assets which were~~a freestanding financial instrument. Although these are publicly traded warrants, they are classified as ~~held for sale~~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.~~

~~(2) The consolidated total assets of Hertz Global and Hertz~~sheet as of ~~March 31, 2021~~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 ~~December 31, 2020 include total assets~~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 ~~VIEs of $513 million~~Reorganization, all existing common stock and ~~$511 million, respectively, which can only~~outstanding Equity Awards were cancelled without any distribution, and the Omnibus Plan deemed to be ~~used to settle obligations~~cancelled. As a result of the ~~VIEs. See "Special Purpose Entities"~~Equity Award cancellation, the Company recognized $10 million related to the unrecognized portion of share-based compensation in ~~Note 6, "Debt," and "767 Auto Leasing LLC" in Note 13, "Related Party Transactions," for further information.~~

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

six months ended June 30, 2021. See Note 18, "Reorganization Items, Net.
"

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

Unaudited

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

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.

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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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.

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.

Hertz Global

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

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.

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

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

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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~~(DEBTORS-IN-POSSESSION)~~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

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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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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.

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

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.

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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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.

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

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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Unaudited



(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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Unaudited

Hertz

Three Months Ended
March 31,
(In millions) 2021 2020
Adjusted EBITDA:
U.S. Rental Car $ 24 $ (199)
International Rental Car (6) (45)
All Other Operations(1)
13 24
Total reportable segments 31 (220)
Corporate(2)
(29) (23)
Total Hertz Global 2 (243)
Adjustments:
Non-vehicle depreciation and amortization (54) (53)
Non-vehicle debt interest, net (44) (55)
Vehicle debt-related charges(3)
(28) (9)
Restructuring and restructuring related charges(4)
(12) (7)
Information technology and finance transformation costs(5)
(6) (17)
Reorganization items, net(6)
(42) 0
Pre-reorganization charges and non-debtor financing charges(7)
(23) 0
Gain from the Donlen Sale(8)
392 0
Other items(9)
83 25
Income (loss) before income taxes $ 268 $ (359)



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

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

(3)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.

~~(4)~~(5)Represents charges incurred under restructuring actions as defined in U.S. GAAP, excluding impairments and asset write-downs. See Note 8, "Restructuring," for further information. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

~~(5)~~(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."

(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 ~~16,~~18, "Reorganization Items, Net."

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

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

~~(9)~~(11)Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests. For ~~the three months ended March 31,~~ 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.~~liability recorded in the first quarter. For ~~the three months ended March 31,~~ 2020, also includes a $20 million gain on the sale of non-vehicle capital assets, ~~and $13~~which was recorded in the first quarter, partially offset by second quarter charges of $18 million ~~in unrealized gains on derivative financial instruments.~~for losses associated with certain vehicle damages.

3643

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

(12)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note ~~15—~~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 ~~sheets~~sheet as of ~~March 31, 2021 and~~ December 31, 2020 ~~include~~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 statement of operations.Cases.

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

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



(In millions)	December 31, 2020
Accounts payable	$	267
Accrued liabilities(1)	166
Accrued taxes, net	19
Accrued interest on debt subject to compromise	70

Debt subject to compromise(2)	4,443


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

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

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

(3) See Note ~~13,~~15, "Related Party Transactions," for details of a ~~Pre-petition~~pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of ~~March 31, 2021 and~~ December 31, 2020.

Note ~~16—~~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 statement of operations for the three and six months ended ~~March 31, 2021.~~June 30, 2021 and 2020.

~~For~~

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The following tables summarize reorganization items, net:

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 ~~three months ended March 31,~~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 ~~the Company incurred $42 million of charges primarily~~which was subsequently terminated.

(3) See Note 12, Stock-Based Compensation for ~~professional fees totaling $57 million, partially offset by the write-off of certain Pre-petition claims and lease settlements totaling $15 million.~~ further details.

Cash payments during the three and six months ended ~~March 31,~~June 30, 2021 totaled ~~$58 million. Additionally, $57~~$422 million and $7$480 million, ~~were recorded in accrued liabilities and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2021.~~respectively. The Company incurred $175 million of charges during the year ended December 31, 2020 comprised primarily of professional fees, of which $102 million ~~were~~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.

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

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

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

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~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

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

~~THE DEBTORS~~

~~CONDENSED COMBINED BALANCE SHEET~~

~~(in millions)~~

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

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

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

~~Unaudited~~

~~THE DEBTORS~~

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

~~(in millions)~~


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

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


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

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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)~~


	Three Months Ended March 31, 2021

























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

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



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


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







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

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

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

Hertz Global Holdings, Inc. (together with its consolidated subsidiaries and variable interest entities, "Hertz Global") is a holding company and its principal, wholly-owned subsidiary is The Hertz Corporation (together with its consolidated subsidiaries and variable interest entities, "Hertz"). 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.

This MD&A should be read in conjunction with the MD&A presented in our 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 ~~March 31,~~June 30, 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 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.

•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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THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

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

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

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

OUR COMPANY

Hertz Holdings was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns Hertz, Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918. We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands. In addition to vehicle rental, we ~~provide~~provided integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, which was sold on March 30, 2021. We operate our vehicle rental business globally from company-owned, licensee and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East and New Zealand.

OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT

Impact of COVID-19 on our Business

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

Voluntary Petitions for Bankruptcy and Emergence

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 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

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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)

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.

~~The Debtors filed with~~Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the ~~Bankruptcy Court a proposed Joint Chapter 11~~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 ~~Debtors, dated~~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 ~~March 1, 2021,~~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 ~~related proposed Disclosure Statement. The Debtors subsequently filed~~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 ~~Bankruptcy Court a proposed First Amended Joint Chapter 11~~ 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 ~~Debtors~~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 ~~related~~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

~~(DEBTORS-IN-POSSESSION)~~

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

~~proposed Disclosure Statement,~~On the Effective Date, in ~~each case dated as of March 29, 2021; a proposed Second Amended Joint Chapter 11~~accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of ~~the Debtors~~Series A Preferred Stock to Apollo and received gross proceeds of $1.5 billion, less a ~~related proposed Disclosure Statement, in each case dated as of April 3, 2021; a proposed Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors~~2% upfront discount and a related proposed Disclosure Statement, in each case dated as of April 10, 2021; a proposed Second Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, dated as of April 14, 2021 and April 15, 2021, respectively; a proposed Third Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 16, 2021; and a proposed Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors and a related proposed Disclosure Statement, in each case dated as of April 21, 2021, which Disclosure Statement the Debtors further updated on April 21, 2021. On April 22, 2021, the Debtors filed the Proposed Plan and Disclosure Statement.

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

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

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

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

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

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

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

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

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

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

~~Table of Contents~~

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

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

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

In light of continuing interest from the Alternative Sponsor Group, on April 28, 2021, the Bankruptcy Court entered the Bid Procedures Order, among other things, establishing bidding and auction procedures relating to the submission of alternative plan proposals.issuance fees.

On ~~May 2, 2021,~~ the ~~Alternative Sponsor Group submitted~~Effective Date, in accordance with the ~~Alternative~~ Plan ~~Proposal.~~of Reorganization and 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 ~~May 4, 2021, we determined~~the Effective Date, reorganized Hertz entered into the First Lien Credit Agreement that ~~the Alternative Plan Proposal constitutes a “Superior Proposal” as that term is defined under the Debtors’ EPCA with the Plan Sponsors dated as~~provides for an aggregate amount of April 3, 2021 and approved by the Bankruptcy Court on April 22, 2021. Pursuant to the Bid Procedures Order, the Plan Sponsors will have until 5:00 p.m., Eastern Time, on May 7, 2021 to indicate if they intend to counter the Alternative Plan Proposal. If the Plan Sponsors determine to counter the Alternative Plan Proposal, an Auction will be conducted on May 10, 2021. A hearing before the Bankruptcy Court to approve the results$2.8 billion comprised of the ~~Auction along~~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 ~~supplemental solicitation materials, if any, will be conducted on May 14, 2021.~~a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion.

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

~~Liquidity Considerations Following the Chapter 11 Filing~~

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

On January 27, 2021, Hertz subsidiary, TCL Funding Limited Partnership, entered into the Funding LP Series 2021-A Notes which provide for aggregate maximum borrowings of CAD$350 million on a revolving basis, subject to availability. The initial draw of CAD$120 million was used, in part, to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest, as disclosed inequity, 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.

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

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

As a result of our actions to continue to eliminate costs, ~~in 2021,~~ we (i) negotiated rent concessions in the form of abatements of fixed and variable rent payments for certain of our airport and off airport locations in the amount of approximately $100 million which substantially represents amounts previously due in the period between January 1, 2021 and March 31, 2021; (ii) initiated a restructuring program in our International RAC segment; and (iii) ~~reduced~~decreased our vehicle expenditures ~~by $2.8 billion,~~$820 million, or ~~65%~~17%, in the six months ended June 30, 2021 compared to the 2020 period; and (iv) reduced our capital expenditures by ~~$50~~$5 million, or ~~85%~~38%, and by $55 million, or 76%, in the ~~first quarter of~~three and six months ended June 30, 2021, respectively, compared to ~~2020.~~the 2020 periods. We continue to review our cost structure and fleet size to align with expected rental car volumes, including in response to ~~potential~~ increases in travel as indicated by traveler throughput increases beginning in March 2021 and steadily rising thereafter, as measured by the U.S. Transportation Security Administration.

Our Business

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

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

Our ~~total~~ 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, which was sold on March 30, ~~2021, and other business activities.~~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 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.

~~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)~~

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. Substantially all of the assets~~international operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and ~~liabilities of our Donlen business were classified as held for sale in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020,~~services, customers, delivery methods and ~~were sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~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 ~~as a result of~~ the Second Lease Order, the Debtors are to dispose of 121,510 lease vehicles, at least 113,381 of which will be non-program vehicles, and reach a minimum cumulative vehicle disposition proceeds of $2.0 billion by September 30, 2021. Additionally, the Second Lease Order directed the Debtors to (i) have no more than 157,262 lease vehicles by September 30, 2021. The continuing semiconductor microchip manufacturing shortage ~~may delay or impact~~(the "Chip Shortage") has impacted our ability to obtain a sufficient supply of new vehicles to align with rental demands and may continue to do so through the first quarter of 2022. ~~This shortage~~The Chip Shortage may result in 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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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)

insurance, utilities, maintenance and other facility-related expenses, the costs of operating our information technology systems and minimum staffing costs, remain fixed and cannot be adjusted for seasonal demand. During the first ~~quarter~~half of 2021, the Bankruptcy Court approved the rejection of the real property leases with respect to 278 off airport locations and 2634 airport locations with unexpired leases were authorized by the Bankruptcy Court for rejection in our ~~U.S.~~Americas RAC segment.

Three and Six Months Ended ~~March 31,~~June 30, 2021 Operating Overview

The global COVID-19 pandemic ~~continued~~began to ~~negatively affect~~lessen its impact on airline travel ~~during~~in the ~~three months ended March 31, 2021 compared to the three months ended March 31, 2020. As a large portion~~second quarter of ~~our business is generated at airport locations, disruptions in airline travel has continued to adversely impact our results of operations. However,~~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 ~~second~~third quarter as reflected in Total RPD and Transaction Days. Consequently, we expect increased demand and improved pricing to continue in the ~~second quarter~~remainder of ~~2021.~~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 six months ended June 30, 2021 and 2020.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

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

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

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

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

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

Critical Accounting Estimates

The continued ~~impacts~~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

Our principal assets are revenue earning vehicles, which represent approximately ~~48%~~50% of our total assets as of ~~March 31,~~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.

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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)~~

Recoverability of Goodwill and Indefinite-lived Intangible Assets

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 Topic 350.

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 aour reduction in ~~our~~ cash flow projections. The quantitative fair value test utilized our most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 1% and a range of discount rates between 13% and 15%. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million.

As of June 30, 2021, we 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 our 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 for our ~~U.S.~~Americas RAC ~~segment~~or International RAC segments in the ~~first~~second quarter of 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 our expected timing of emergence from bankruptcy,~~ market events or conditions, including the impact of COVID-19 on our business and the travel industry, and the resulting impact to our assumptions about future estimated cash flows and the weighted average cost of capital. If our expectations of our operating results, both in magnitude or timing, do not materialize, or if our weighted average cost of capital increases, we may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

Subrogation Receivables

The continued ~~impact~~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.

~~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.

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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)

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ


		Three Months Ended March 31,				Percent Increase/(Decrease)	Three Months Ended June 30,							Percent Increase/(Decrease)			Six Months Ended June 30,					Percent Increase/(Decrease)
($ In millions)	($ In millions)	2021		2020				($ In millions)	2021				2020			Percent Increase/(Decrease)		2021			2020			Percent Increase/(Decrease)
Total revenues	Total revenues	$	1,289	$	1,923	(33)%				Total revenues	$	1,873		$	832		NM		$	3,161		$	2,755		15%
Direct vehicle and operating expenses	Direct vehicle and operating expenses	827		1,241		(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	243		677		(64)				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	156		208		(25)				Selling, general and administrative expenses	172			164			5		321			368			(13)
Interest expense, net:	Interest expense, net:									Interest expense, net:
Vehicle	Vehicle	104		118		(12)				Vehicle	98			132			(26)		202			250			(19)
Non-vehicle	Non-vehicle	44		55		(20)				Non-vehicle	91			43			NM		135			99			36
Interest expense, net	Interest expense, net	148		173		(14)				Interest expense, net	189			175			8		337			349			(3)

Technology-related intangible and other asset impairments										Technology-related intangible and other asset impairments	—			193			(100)		—			193			(100)
Write-off of intercompany loan										Write-off of intercompany loan	—			133			(100)		—			133			(100)
Other (income) expense, net	Other (income) expense, net	(3)		(17)		(84)				Other (income) expense, net	(10)			2			NM		(13)			(15)			(16)
Reorganization items, net	Reorganization items, net	42		—		NM				Reorganization items, net	469			23			NM		513			23			NM
(Gain) from the sale of a business	(Gain) from the sale of a business	(392)		—		NM				(Gain) from the sale of a business	(8)			—			NM		(400)			—			NM
Income (loss) before income taxes	Income (loss) before income taxes	268		(359)		NM				Income (loss) before income taxes	(51)			(1,176)			NM		216			(1,536)			NM
Income tax (provision) benefit	Income tax (provision) benefit	(79)		3		NM				Income tax (provision) benefit	46			219			NM		(33)			224			NM
Net income (loss)	Net income (loss)	189		(356)		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		1		(5)				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	$	190	$	(355)	NM				Net income (loss) attributable to Hertz	$	(4)		$	(952)		NM		$	185		$	(1,306)		NM
Adjusted Corporate EBITDA(a)	Adjusted Corporate EBITDA(a)	$	2	$	(243)	NM				Adjusted Corporate EBITDA(a)	$	639		$	(587)		NM		$	642		$	(830)		NM

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

NM - Not meaningful

Three Months Ended ~~March 31,~~June 30, 2021 Compared with Three Months Ended ~~March 31,~~June 30, 2020

Total revenues ~~decreased $634 million~~increased $1.0 billion in the ~~first~~second quarter of 2021 compared to 2020 due primarily from increased travel demand resulting from the ~~continued impact~~easing of ~~COVID-19,~~government-imposed travel restrictions, where there was ~~a decrease~~an increase of ~~$435 million~~$1.1 billion and ~~$161~~$105 million in our ~~U.S.~~Americas RAC and International RAC segments, respectively. ~~U.S.~~Americas RAC revenues ~~decreased~~increased due primarily to ~~lower~~higher volume ~~partially offset by higher~~and pricing. Excluding a ~~$19~~$24 million fx impact, revenues for our International RAC segment ~~decreased $180~~increased $81 million due to ~~lower~~higher pricing and volume, ~~and pricing.~~primarily in Australia.

DOE ~~decreased $414~~increased $295 million in the ~~first~~second quarter of 2021 compared to 2020 due primarily to ~~a decrease~~an increase of ~~$299~~$262 million and ~~$124~~$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 personnel costs, 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 ~~$14~~$17 million fx impact, DOE in our International RAC segment ~~decreased $138~~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 from COVID-19 on total revenues described above and lower personnel~~increased travel demand, partially offset by a reduction in fixed costs.

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

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~~(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 $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 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 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 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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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)

~~SG&A~~segment. Americas RAC revenues increased due primarily to increased pricing resulting from increased travel demand and constraints on vehicles due to the Chip Shortage affecting new vehicle production. Excluding a $42 million fx impact, revenues for our International RAC segment decreased ~~$52~~$79 million due to lower volume, partially offset by higher pricing in Australia.

DOE decreased $121 million in the first half of 2021 compared to 2020 due primarily to a decrease of $69 million and $57 million in our International RAC and 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 Americas RAC DOE was due primarily to lower fleet costs due to reduced fleet size, lower personnel costs due to market constraints and lower fixed costs resulting from cost-reduction initiatives.

Depreciation of revenue earning vehicles and lease charges decreased $926 million in the first half of 2021 compared to 2020 due to decreases of $603 million, $245 million and $78 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 reduction in fleet size due to the Chapter 11 Cases and the Chip Shortage affecting new vehicle production. The decrease in other operations was due to the sale of our Donlen business in the first quarter of 2021. Excluding a $6 million impact of fx, depreciation of revenue earning vehicles and lease charges for our International RAC segment decreased $84 million due primarily to right sizing the fleet and the Chip Shortage affecting new vehicle production.

SG&A decreased $46 million in the first half of 2021 compared to 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 and lower facility costs~~segment. Excluding a $6 million fx impact, SG&A in our International RAC ~~segment.~~segment decreased $15 million due primarily to lower 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, net decreased ~~$14~~$48 million in the first ~~quarter~~half of 2021 compared to 2020 due primarily to lower debt levels, partially offset by higher market interest rates, primarily in our ~~U.S.~~Americas RAC segment.

Non-vehicle interest expense, net ~~decreased $11~~increased $36 million in the first ~~quarter~~half 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, 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 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 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 $3$13 million ~~for~~in the first ~~quarter~~half of 2021 compared to other income of ~~$17~~$15 million in the first ~~quarter~~half of 2020. Other income in 2021 was due in part to the gain on the sales of certain franchises in our Americas RAC segment. Other income in 2020 ~~which~~ was ~~primarily~~ comprised of a $20 million gain due to additional cash received from the sale of non-vehicle capital assets, which was completed in the fourth quarter of ~~2019.~~2019, partially offset by $4 million in pension-related settlement charges.

We incurred ~~$42~~$513 million of net reorganization charges in the first ~~quarter~~half 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

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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 ~~totaling $57 million, partially offset by the write-off of certain Pre-petition claims and lease settlements totaling $15 million,~~ associated with the Chapter 11 Cases.

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

The effective tax rate was ~~29% and 1%~~15% in the first ~~quarter~~half of 2021 and 2020, ~~respectively, and we~~respectively. We recorded a tax provision of ~~$79~~$33 million ~~and~~in the six months of 2021 compared to a tax benefit of $3$224 million in the ~~first quarter~~six months of ~~2021 and 2020, respectively.~~2020. The ~~effective income tax rate and related~~increase in the tax provision in 2021 compared to ~~the tax benefit in~~ 2020 ~~were~~was 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 ~~gain on the Donlen Sale.~~tax 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 second quarter and first ~~quarter~~half of 2020, 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 second quarter and first ~~quarter~~half of 2020, Hertz ~~Global~~ had $1$27 million and $28 million, respectively, of income tax benefit that was incremental to the ~~amount~~amounts shown for ~~Hertz.~~

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.

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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)

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

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


		Three Months Ended March 31,						Percent Increase/(Decrease)	Three Months Ended June 30,								Percent Increase/(Decrease)				Six Months Ended June 30,						Percent Increase/(Decrease)
($ In millions, except as noted)	($ In millions, except as noted)	2021			2020					($ In millions, except as noted)	2021					2020				Percent Increase/(Decrease)		2021				2020				Percent Increase/(Decrease)
Total revenues	Total revenues	$	946		$	1,381		(32)%				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	$	205		$	463		(56)				Depreciation of revenue earning vehicles and lease charges	$	80			$	419			(81)		$	290			$	893			(68)
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	670		$	969		(31)				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	71		%	70		%					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	$	51		$	115		(56)				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		%	8		%					Selling, general and administrative expenses as a percentage of total revenues	4		%		12		%				5		%		9		%
Vehicle interest expense	Vehicle interest expense	$	71		$	86		(18)				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	$	24		$	(199)		NM				Adjusted EBITDA	$	664			$	(485)			NM		$	690			$	(690)			NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	19,776			31,564			(37)				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)	292,154			518,580			(44)				Average Vehicles (in whole units)(c)	350,122				517,973				(32)		325,364				526,247				(38)
Vehicle Utilization(c)	Vehicle Utilization(c)	75		%	67		%					Vehicle Utilization(c)	78		%		28		%				77		%		48		%
Total RPD (in whole dollars)(d)	Total RPD (in whole dollars)(d)	$	47.63		$	42.74		11				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)	$	1,075		$	867		24				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)	$	234		$	298		(21)				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	1		%	9		%					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 ~~March 31,~~June 30, 2021 Compared with Three Months Ended ~~March 31,~~June 30, 2020

Total ~~U.S.~~Americas RAC revenues ~~decreased $435 million~~increased $1.1 billion in the ~~first~~second quarter of 2021 compared to 2020 due primarily to ~~lower~~higher volume ~~partially offset by higher~~and pricing. The ~~37% decrease~~increase in Transaction Days was driven by ~~the impact from COVID-19 with~~ volume ~~declines~~increases in leisure and most business ~~categories. There was an 11%~~categories as government-imposed travel restrictions began to lift due to decreasing COVID-19 cases primarily across the U.S. The increase in Total RPD ~~partially offsetting declines in volume~~was due primarily to stronger pricing in leisure and most business categories resulting from ~~lower fleet levels in order~~increased pricing across the industry due to ~~meet~~increased travel demand and industry-wide constraints on vehicles due to the ~~increasing demand from travel commencing in~~Chip Shortage affecting new vehicle production during the ~~middle~~second quarter of ~~the first quarter~~ 2021. ~~Off airport~~Airport revenues comprised ~~37%~~71% of total revenues for the segment in the ~~first~~second quarter of 2021 as compared to ~~35%~~40% in the ~~first~~second quarter of 2020, 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 ~~$258~~$339 million in the ~~first~~second quarter of 2021 compared to 2020. Average Vehicles decreased ~~44%~~ due in part to a reduction in fleet size ~~due to~~in connection with our restructuring and the ~~Chapter 11 Cases.~~Chip Shortage affecting new vehicle production, partially offset by the acquisition of used vehicles. Depreciation Per Unit Per Month decreased to ~~$234~~$76 in the ~~first~~second quarter of 2021 compared to ~~$298~~$270 in the ~~first~~second quarter of 2020 due primarily to strength in residual values.

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

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

DOE for Americas RAC increased $262 million in the second quarter of 2021 compared to 2020 due primarily to higher volume driven by the increased travel demand discussed above, partially offset by lower facility costs due primarily to rent abatements and the consolidation of our off airport locations.

SG&A for ~~U.S.~~Americas RAC increased $6 million in the second quarter of 2021 compared to 2020 due primarily to increased marketing spend as travel demand increased the lifting of air travel restrictions discussed above and the start of our peak season.

Vehicle interest expense for Americas RAC decreased ~~$64~~$22 million in the second quarter of 2021 compared to 2020 due primarily lower debt levels 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 debt resulting from the implementation of the Plan of Reorganization and certain contract-related charges.

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

Total Americas RAC revenues increased $646 million in the first ~~quarter~~half of 2021 compared to 2020 due primarily to higher pricing. The increase in Total RPD was driven primarily by increased pricing in leisure and most business categories resulting from increased pricing across the industry due to increase travel demand and industry-wide constraints on vehicles due to the Chip Shortage affecting new vehicle production. Airport revenues comprised 68% of total revenues for the segment in the first half of 2021 as compared to 58% in the first half of 2020, due primarily to the lifting of air travel restrictions that had been in place associated with COVID-19.

Depreciation of revenue earning vehicles and lease charges for Americas RAC decreased $603 million in the first half of 2021 compared to 2020. Average Vehicles decreased due primarily to a reduction in fleet size in connection with our restructuring and the Chip Shortage affecting new vehicle production. Depreciation Per Unit Per Month in the first half of 2021 decreased to $149 compared to $283 in the first half of 2020 due primarily to strength in residual values.

DOE for Americas RAC decreased $57 million in the first half of 2021 compared to 2020 due primarily to lower fleet costs due to a reduced fleet size, lower personnel costs due to market constraints and lower facilities costs resulting from cost-reduction initiatives.

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

Vehicle interest expense for ~~U.S.~~Americas RAC decreased ~~$15~~$37 million in the first ~~quarter~~half of 2021 compared to 2020 due primarily to ~~vehicle dispositions and~~ lower debt levels resulting from vehicle dispositions associated with the ~~decline in travel due to COVID-19.~~Chapter 11 Cases.

~~International Rental Car~~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.

Three Months Ended
March 31, Percent Increase/(Decrease)
($ in millions, except as noted) 2021 2020
Total revenues $ 207 $ 368 (44)%
Depreciation of revenue earning vehicles and lease charges $ 38 $ 89 (58)
Direct vehicle and operating expenses $ 141 $ 265 (47)
Direct vehicle and operating expenses as a percentage of total revenues 68 % 72 %
Selling, general and administrative expenses $ 36 $ 48 (24)
Selling, general and administrative expenses as a percentage of total revenues 17 % 13 %
Vehicle interest expense $ 21 $ 21 (1)
Adjusted EBITDA $ (6) $ (45) (86)
Transaction Days (in thousands)(b)
4,872 8,863 (45)
Average Vehicles (in whole units)(c)
75,446 147,987 (49)
Vehicle Utilization(c)
72 % 66 %
Total RPD (in whole dollars)(d)
$ 42.49 $ 45.57 (7)
Total RPU Per Month (in whole dollars)(e)
$ 915 $ 910 1
Depreciation Per Unit Per Month (in whole dollars)(f)
$ 168 $ 220 (24)
Percentage of program vehicles as of period end 26 % 37 %

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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)

International RAC



	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 ~~March 31,~~June 30, 2021 Compared with Three Months Ended ~~March 31,~~June 30, 2020

Total revenues for International RAC ~~decreased $161~~increased $105 million in the ~~first~~second quarter of 2021 compared to 2020 due to ~~lower volume~~higher pricing and ~~pricing.~~volume. Excluding a ~~$19~~$24 million fx impact, revenues ~~decreased $180~~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 ~~most~~ business categories ~~driven by the continued impact of COVID-19, partially offset by higher pricing~~as government-imposed travel restrictions were eased resulting in ~~Australia.~~increased travel demand.

Depreciation of revenue earning vehicles and lease charges for International RAC decreased ~~$51~~$34 million in the ~~first~~second quarter of 2021 compared to 2020. Excluding a $3 million fx impact, depreciation decreased ~~$54~~$37 million. Average Vehicles for International RAC decreased ~~49%~~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 ~~$168~~$174 for the ~~first~~second quarter of 2021 compared to ~~$220~~$227 in 2020 due to the strength in residual values.

DOE for International RAC ~~decreased $124~~increased $36 million in the ~~first~~second quarter of 2021 compared to 2020. Excluding a ~~$14~~$17 million fx impact, DOE ~~decreased $138~~increased $19 million due primarily to ~~lower volume driven by the impact from COVID-19 on total revenues described above and lower~~higher personnel costs due to restructuring initiatives and reductions in employee furloughs and associated government support across Europe ~~related to COVID-19.~~

and higher volume driven by the increased travel demand discussed above, partially offset by lower facility costs resulting from 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 ~~decreased $11~~increased $4 million in the ~~first~~second quarter of 2021 compared to 2020. Excluding a $4$3 million fx impact, SG&A increased $1 million due primarily to higher personnel costs due to restructuring initiatives.

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

Total revenues for International RAC decreased $37 million in the first half of 2021 compared to 2020 due primarily to lower volume, partially offset by higher pricing. Transactions Days decreased 22% and Total RPD increased 7%. Excluding a $42 million fx impact, revenues decreased $79 million due to lower volume across most leisure and business categories driven by continued impact of 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 $78 million in the first half of 2021 compared to 2020. Excluding a $6 million fx impact, depreciation decreased $84 million. Average Vehicles for International RAC decreased due to right sizing of the fleet and the Chip Shortage affecting new vehicle production. Depreciation Per Unit Per Month for International RAC decreased to $169 in the first half of 2021 compared to $222 in 2020 due to strength in residual values.

DOE for International RAC decreased $69 million in the first half of 2021 compared to 2020. Excluding a $30 million fx impact, DOE decreased $98 million due primarily to lower volume driven by the impact from COVID-19 on total revenues for the first half of 2021 described above, lower personnel costs due to government support across Europe related to 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 $9 million in the first half of 2021 compared to 2020. Excluding a $6 million fx impact, SG&A decreased $15 million due primarily to lower ~~facility~~personnel costs due to employee furloughs and ~~marketing costs resulting from cost-reduction~~government support across Europe related to COVID-19, partially offset by increases related to restructuring initiatives.

~~All Other Operations~~

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

~~Results of operations~~Reorganization items, net for ~~this segment are as follows:~~

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

~~NM - Not meaningful~~

~~Donlen's revenues and Adjusted EBITDA were unfavorable~~International RAC increased $12 million in the first ~~quarter~~half of 2021 compared to 2020 primarily due to ~~lower leasing volume~~advisory fees related to debt refinancings and the loss on extinguishment of the European Vehicle Notes resulting from the ~~impact~~implementation of ~~COVID-19. The decrease in depreciation~~the Plan of ~~revenue earning vehicles and leasing charges is due to the suspension of depreciation for the Donlen business while classified as held for sale.~~Reorganization.

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, 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:

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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)

Hertz

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



	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
March 31,
(In millions) 2021 2020
Net income (loss) attributable to Hertz Global $ 190 $ (356)
Adjustments:
Income tax provision (benefit) 79 (4)
Non-vehicle depreciation and amortization 54 53
Non-vehicle debt interest, net 44 57
Vehicle debt-related charges(1)
28 9
Restructuring and restructuring related charges(2)
12 7
Information technology and finance transformation costs(3)
6 17
Reorganization items, net(4)
42 —
Pre-reorganization and non-debtor financing charges(5)
23 —
Gain from the Donlen Sale(6)
(392) —
Other items(7)
(84) (26)
Adjusted Corporate EBITDA $ 2 $ (243)



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

~~(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 Part I, Item 1 of this Quarterly Report on Form 10-Q.

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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 15, "Related Party Transactions," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

(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.

~~(4)~~(7)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as ~~described~~discussed in Note ~~16,~~18, "Reorganization Items, Net," in Part I, Item 1 of this Quarterly Report on Form ~~10-Q, including professional fees.~~10-Q.

~~(5)~~(8)Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

~~(6)~~(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.

~~(7)~~(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 ~~due to~~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. In~~liability recorded in the first quarter. For 2020, also includes a $20 million gain on the sale of non-vehicle capital assets, ~~and $13~~which was recorded in the first quarter, partially offset by second quarter charges of $18 million ~~in unrealized gains on derivative financial instruments.~~for losses associated with certain vehicle damages.

~~Table of Contents~~

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

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

(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 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 March 31,									Three Months Ended June 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Transaction Days (in thousands)	Transaction Days (in thousands)	19,776		31,564		4,872		8,863		Transaction Days (in thousands)	24,992		13,321		4,893		3,900
Average Vehicles (in whole units)	Average Vehicles (in whole units)	292,154		518,580		75,446		147,987		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)	90		91		90		91		Number of days in period (in whole units)	91		91		91		91
Available Car Days (in thousands)	Available Car Days (in thousands)	26,294		47,191		6,790		13,467		Available Car Days (in thousands)	31,861		47,136		6,465		10,411
Vehicle Utilization	Vehicle Utilization	75	%	67	%	72	%	66	%	Vehicle Utilization	78	%	28	%	76	%	37	%



	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	%

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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)

(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 March 31,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2021		2020		2021		2020
Total revenues		$	946	$	1,381	$	207	$	368
Revenues										Revenues	$	1,643	$	543	$	230	$	125
Ancillary retail vehicle sales revenues	Ancillary retail vehicle sales revenues	(4)		(32)		—		—		Ancillary retail vehicle sales revenues	(7)		(38)		—		—
Foreign currency adjustment(1)	Foreign currency adjustment(1)	—		—		—		36		Foreign currency adjustment(1)	(1)		1		—		14
Total Rental Revenues	Total Rental Revenues	$	942	$	1,349	$	207	$	404	Total Rental Revenues	$	1,635	$	506	$	230	$	139
Transaction Days (in thousands)	Transaction Days (in thousands)	19,776		31,564		4,872		8,863		Transaction Days (in thousands)	24,992		13,321		4,893		3,900
Total RPD (in whole dollars)	Total RPD (in whole dollars)	$	47.63	$	42.74	$	42.49	$	45.57	Total RPD (in whole dollars)	$	65.42	$	37.95	$	47.07	$	35.54



	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, 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 March 31,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2021		2020		2021		2020
Total Rental Revenues	Total Rental Revenues	$	942	$	1,349	$	207	$	404	Total Rental Revenues	$	1,635	$	506	$	230	$	139
Average Vehicles (in whole units)	Average Vehicles (in whole units)	292,154		518,580		75,446		147,987		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)	$	3,224	$	2,601	$	2,744	$	2,730	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)	$	1,075	$	867	$	915	$	910	Total RPU Per Month (in whole dollars)	$	1,557	$	325	$	1,081	$	404



	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

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

(f) Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges per vehicle per month and is calculated as depreciation of revenue earning vehicles and lease charges, 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 March 31,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ 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	$	205	$	463	$	38	$	89	Depreciation of revenue earning vehicles and lease charges	$	80	$	419	$	36	$	70
Foreign currency adjustment(1)	Foreign currency adjustment(1)	—		—		—		9		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	$	205	$	463	$	38	$	98	Adjusted depreciation of revenue earning vehicles and lease charges	$	80	$	420	$	37	$	78
Average Vehicles (in whole units)	Average Vehicles (in whole units)	292,154		518,580		75,446		147,987		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)	$	702	$	893	$	504	$	662	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)	$	234	$	298	$	168	$	220	Depreciation Per Unit Per Month (in whole dollars)	$	76	$	270	$	174	$	227



	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, 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 ~~March 31,~~June 30, 2021, we had ~~$1.1~~$1.8 billion of unrestricted cash and unrestricted cash equivalents and ~~$1.3 billion~~$875 million of restricted cash and restricted cash equivalents. As of ~~March 31,~~June 30, 2021, ~~$390~~$366 million of unrestricted cash and unrestricted cash equivalents and ~~$68~~$172 million of restricted cash and restricted cash equivalents were held by our subsidiaries outside of the U.S. ~~As a result of COVID-19,~~Beginning in the quarterly period ended March 31, 2020, we 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.

Voluntary Petitions for Bankruptcy and Emergence

The COVID-19 pandemic spread across the globe, resulting in global economic slowdown and disruptions of travel and other industries, many of which negatively impacted our business and industry. In addition, COVID-19 resulted in our employees, contractors, suppliers, customers and other business partners being prevented from conducting normal business activities temporarily or for an indefinite period of time. This was largely caused by shutdowns that

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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)

were initially requested or mandated by governmental authorities. Additionally, individuals voluntarily reduced travel in attempts to avoid the outbreak. In response, we began aggressive actions to eliminate costs. However, we faced significant ongoing expenses.

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 Hertz Corporation, et al., Case No. 20-11218 (MFW). Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk, a third party bankruptcy claims and noticing agent. The information on this website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

~~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)~~

~~Borrowing Capacity and Availability~~

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of our existing debt obligations. As a result of the filing of the Chapter 11 Cases, the remaining capacity under all of our revolving credit facilities was ~~terminated, as disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~terminated. Consequently, the sales proceeds 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 funding under those facilities has been retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness. ~~Proceeds from vehicle receivables, excluding manufacturer rebates, as of March 31, 2021 and ongoing vehicle sales must be applied to vehicle debt in amortization.~~

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

As disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, on ~~April 21,~~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 ~~approved~~on May 14, 2021. On June 10, 2021, the ~~Debtors' Proposed~~ 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 ~~Disclosure Statement,~~the Debtors emerged from Chapter 11.

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 reorganized Hertz Global common stock by the Plan Sponsors and ~~as set forth~~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 ~~the associated Transaction Documents, events related~~proceeds from our 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;

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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)

Petition Date), subject to the rights of creditors (if any) to bring a 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 (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.

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 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 HVF III ABS facility program of $6.8 billion comprised of variable funding notes with a principal amount up to $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 ~~are as follows.~~and all existing ABS facilities under the HVF II U.S. ABS Program were repaid in full and terminated. See Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

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

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

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

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

~~Table of Contents~~

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

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

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

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

~~Our inability to retain any proceeds from the sale of vehicles under our U.S. ABS programs means~~believe that ~~our sources of liquidity are primarily our~~ unrestricted cash and unrestricted cash equivalents ~~on hand, cash~~ generated ~~from~~by our operations and upcash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to ~~$800 million from our DIP Credit Agreement. As of March 31, 2021, we had total liquidity of $1.7 billion comprised of $900 million of remaining, committed availability under~~us in the ~~DIP Credit Agreement and $812 million of unrestricted cash and unrestricted cash equivalents, net of the $275 million minimum liquidity requirement under the DIP Credit Agreement, which we believe~~capital markets, will be sufficient to fund ~~our operations through approximately March 31, 2022, assuming we do not experience any unforeseen liquidity needs before then, which could result in~~operating requirements for the ~~utilization of the liquidity in advance of March 31, 2022.~~next twelve months.

Cash Flows - Hertz

As of ~~March 31,~~June 30, 2021 and December 31, 2020, Hertz had unrestricted cash and unrestricted cash equivalents of ~~$1.1~~$1.8 billion and $1.1 billion, respectively, and restricted cash and restricted cash equivalents of ~~$1.3 billion~~$875 million and $383 million, respectively. The following table summarizes the net change in cash, cash equivalents, restricted cash and restricted cash equivalents for the periods shown:


		Three Months Ended March 31,							Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		$ 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	$	200	$	450	$	(250)	Operating activities	$	465	$	629	$	(164)
Investing activities	Investing activities	(18)		(2,097)		2,079		Investing activities	(2,316)		100		(2,416)
Financing activities	Financing activities	692		1,700		(1,008)		Financing activities	3,004		190		2,814
Effect of exchange rate changes	Effect of exchange rate changes	(12)		(4)		(8)		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	$	862	$	49	$	813	Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,145	$	922	$	223

During the ~~three months ended March 31,~~first half of 2021, cash flows from operating activities decreased by ~~$250~~$164 million period over period primarily due to ~~the $190~~a $449 million reduction in working capital requirements, partially offset by a $285 million change in net income ~~(loss)~~ attributable to Hertz, adjusted for non-cash and non-operating items. Cash flows from working capital accounts decreased ~~by $60 million~~primarily due ~~primarily~~ to ~~$58~~$480 million cash paid for reorganization items in the first half of 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 first half of 2021 compare to 2020.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the ~~three months ended March 31,~~first half of 2021, there was a ~~$2.1~~$2.4 billion ~~decrease~~increase in the use of cash for investing activities period over period due primarily to a ~~$1.3~~$3.0 billion net ~~reduction~~increase in cash outflows for revenue earning vehicles as we ~~reduced~~increased fleet purchases to meet stronger demand, compared to the 2020 period in which we were reducing our ~~vehicle purchases~~fleet due to impacts from COVID-19 and the Chapter 11 ~~Cases and~~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 the Donlen Sale.

Net financing cash inflows were ~~$692 million~~$3.0 billion in the ~~three months ended March 31,~~first half of 2021 compared to cash inflows of ~~$1.7 billion~~$190 million in the ~~first three months of~~ 2020 period due primarily to ~~a $973 million~~$5.6 billion in contributions from Hertz Holdings from net ~~reduction in vehicle debt borrowings in~~proceeds received from the ~~2021 period compared to 2020 period as we reduced our vehicle purchases due to the Chapter 11 Cases.~~

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

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 ~~March 31,~~June 30, 2021 and December 31, 2020, Hertz Global had unrestricted cash and unrestricted cash equivalents of ~~$1.1~~$1.8 billion and $1.1 billion, respectively, and restricted cash and restricted cash equivalents of ~~$1.4 billion~~$875 million and $411 million, respectively. The following table summarizes the net change in cash, cash equivalents, restricted cash and restricted cash equivalents for the periods shown:


		Three Months Ended March 31,							Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		$ 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	$	200	$	449	$	(249)	Operating activities	$	465	$	626	$	(161)
Investing activities	Investing activities	(18)		(2,097)		2,079		Investing activities	(2,316)		100		(2,416)
Financing activities	Financing activities	692		1,701		(1,009)		Financing activities	2,976		222		2,754
Effect of exchange rate changes	Effect of exchange rate changes	(12)		(4)		(8)		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	$	862	$	49	$	813	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 any contributions by Hertz 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 Interim Financing LLC, Hertz Vehicle Financing LLC, Rental Car Finance~~III LLC and various international subsidiaries that facilitate ~~our~~the Company's international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

Refer to Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of ~~March 31,~~June 30, 2021. Cash paid for interest during the first ~~three months~~half of 2021 was ~~$30~~$158 million for interest on non-vehicle debt and ~~$69~~$203 million for interest on vehicle debt. Cash paid for interest during the first ~~three months~~half of 2020 was ~~$26~~$67 million for interest on non-vehicle debt and ~~$103~~$193 million for interest on vehicle debt. The ~~$34~~$91 million ~~reduction~~increase in cash paid for ~~vehicle~~non-vehicle debt interest is due primarily to ~~lower debt levels primarily in our U.S. RAC segment.~~non-vehicle interest previously classified as liabilities subject to compromise that was paid upon emergence from Chapter 11 on the Effective Date.

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


(In millions)	(In millions)	March 31, 2021		December 31, 2020		(In millions)	June 30, 2021		December 31, 2020
Cash and cash equivalents		$	1,087	$	1,096
Availability under the Senior RCF		—		—
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	$	1,087	$	1,096	Corporate liquidity	$	3,005	$	1,096

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~(DEBTORS-IN-POSSESSION)~~

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

Covenants

~~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, Hertz’s 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, the Letter of Credit Facility~~first and ~~the Alternative Letter of Credit Facility, as~~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, we are currently in default under our Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, and we are in breach~~calendar year. Both of the ~~Leverage Ratio.~~financial covenants disclosed above are effective beginning in the third quarter of 2021.

~~As defined in~~In addition to financial covenants, the ~~DIP~~First Lien Credit Agreement ~~a liquidity~~contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, conduct of business, maintenance ~~test is required as~~ of ~~each month end period. As of March 31, 2021, we were in~~property and insurance, compliance with environmental laws and the ~~liquidity maintenance test.~~granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments.

~~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.

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

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

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

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

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

~~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)~~

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							2021
First Quarter	First Quarter	$	(1,517)	$	686	$	(831)	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
First Quarter								First Quarter	$	(4,346)	$	2,212	$	(2,134)
Second Quarter								Second Quarter	(610)		2,793		2,183

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

Total								Total	$	(4,956)	$	5,005	$	49

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


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Three Months Ended March 31,								Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	($ in millions)	2021		2020		$ Change		% Change		($ in millions)	2021		2020		$ Change		% Change
U.S. Rental Car		$	(819)	$	(2,051)	$	1,232	(60)	%
International Rental Car		72		79		(7)		(9)
All Other Operations		(84)		(162)		78		(48)
Americas RAC										Americas RAC	$	(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	$	(831)	$	(2,134)	$	1,303	(61)		Total	$	(2,937)	$	49	$	(2,986)	NM

NM - Not meaningful

Revenue earning vehicle expenditures ~~decreased by $2.8~~increased approximately $2.0 billion ~~or 65%, for~~in the ~~first~~second quarter of 2021 compared to the 2020 ~~due primarily to a reduction in vehicle purchases~~period, primarily in our ~~U.S.~~Americas RAC ~~segment.~~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 ~~proceeds~~expenditures, net decreased ~~by $1.5~~$3.0 billion ~~or 69%,~~ for the first ~~quarter~~half of 2021 compared to the 2020 period due primarily to fewer vehicle dispositions, primarily in our ~~U.S.~~Americas RAC segment.

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

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

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

Total								Total	$	(72)	$	50	$	(22)

Non-vehicle capital asset expenditures decreased by ~~$50~~$55 million, or ~~85%~~76%, in the first ~~quarter~~half of 2021 compared to 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:



Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	2021		2020		$ Change		% Change
Americas RAC	$	(3)	$	11	$	(14)	(127)	%
International RAC	(1)		(4)		3		(75)
All other operations	(1)		(2)		1		(50)
Corporate	(2)		(27)		25		(93)
Total	$	(7)	$	(22)	$	15	(68)

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

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

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

CONTRACTUAL OBLIGATIONS

During the first ~~quarter~~half of 2021, the Bankruptcy Court approved the rejection of ~~certain unexpired~~real property leases pursuant to section 365 of the Bankruptcy Code comprised of 278 off airport locations and 2634 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 2020 Form 10-K.

~~Additionally, as a result of filing~~Material changes to our aggregate indebtedness resulting from the Chapter 11 ~~Cases, as~~Emergence are disclosed in ~~Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, certain financings are subject to change following the conclusion of such proceedings. Refer to~~ Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form ~~10-Q for debt classified as liabilities subject~~10-Q. The following table details our contractual cash obligations related to ~~compromise~~our indebtedness as of ~~March 31, 2021~~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 ~~changes to our aggregate indebtedness.~~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," included in our 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," in Part II, Item 8 of our 2020 Form 10-K.

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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see Note 2, "Basis of Presentation and Recently Issued Accounting Pronouncements," in Part I, Item 1 of this 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," included in our 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," of our 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 actions, complying with and operating under the requirements and constraints of the Bankruptcy Code, developing, funding and executing our business plan and continuing as a going concern;

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

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

•the impact of our ~~delisting~~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 or its treatment under the Proposed Plan;~~

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

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

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

•the impact of COVID-19 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 ability of our ~~ability~~reconstituted Board of Directors to ~~successfully restructure~~implement our ~~substantial indebtedness or raise additional capital;~~business strategy;

•our ~~post-bankruptcy capital structure;~~ability to attract and retain key personnel following our emergence from bankruptcy;

•our 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;

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

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

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

•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;

•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 ~~DIP~~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, which could have an effect~~initiatives;

•the impact on the value of our ~~business operations, results~~assets and liabilities as a result of ~~operations and financial condition;~~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 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;

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

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

•~~our ability to 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;

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

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

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

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

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

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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 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, 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 ~~March 31,~~June 30, 2021, our pre-tax operating results would increase (decrease) by approximately $3$5 million. As a result of our emergence from Chapter 11, we anticipate resuming hedging activities to manage such risks, when appropriate, going forward.

Other Income Tax Related Matters

In the second quarter of 2021, the IRS concluded its audit of our 2016 tax year which resulted in 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 received notification from the German and U.S. tax authorities during June 2021 indicating resolution of the transfer pricing matter covering the 2005-2010 tax years. We have reassessed our uncertain tax positions upon receipt of the new information related to the matter for tax years 2011 through 2021, which did not result in a material adjustment. Our assumptions and estimates pertaining to uncertain tax positions require significant judgment. It is possible that the tax authorities could challenge our 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 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," in our 2020 Form 10-K.

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 ~~March 31,~~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 Form 10-K, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended ~~March 31,~~June 30, 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, 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 ~~March 31,~~June 30, 2021:

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

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~~(DEBTORS-IN-POSSESSION)~~

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

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

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

Our remediation efforts were ongoing during the three months ended ~~March 31,~~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 ~~March 31,~~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 Form 10-K, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us int eh reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)

•~~Began administering~~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 of this Quarterly Report on Form 10-Q.

For a description of certain pending legal proceedings see Note ~~12,~~14, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Part I, Item 1A,~~“Risk~~ “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 those risk factors, except as listed below:

AsRisks 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 ~~result~~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 Plan in the Chapter 11 Cases, 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 new directors have different backgrounds, experiences and perspectives from those individuals who previously served on the board of directors of the Company at the time of the commencement of the Chapter 11 Cases ~~we are subject~~and, thus, may 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 ~~the risks and uncertainties associated with Chapter 11 Cases and operating under Chapter 11 may restrict our ability~~time, to ~~pursue strategic and operational initiatives.~~

~~For the duration of the Chapter 11 Cases, our operations and our ability to execute~~implement changes in our business strategy which may affect our operations. There is, however, no guarantee that the strategic initiatives and plans, whether current or future, of the Board of Directors will be ~~subject to the risks~~implemented in a timely manner or at all and, ~~uncertainties associated with bankruptcy. These risks include:~~

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

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

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

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

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

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

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

~~We may not be able to obtain Bankruptcy Court confirmation~~guarantee that the operational and financial objectives of the ~~Proposed Plan~~reconstituted Board of Directors will be achieved in a timely manner or ~~may have to modify the terms of the Proposed Plan.~~at all.

The ~~Proposed Plan, which~~ability to attract and retain key personnel is critical to the success of our business and may be affected by our emergence from bankruptcy.

The success of our business depends on key personnel. The ability to attract and retain these key personnel may be affected by our emergence from bankruptcy, the uncertainties currently facing the business and changes we ~~filed with the Bankruptcy Court, is subject to approval by each class of holders of claims and interests entitled to vote. Even if they approve the Proposed Plan, the Bankruptcy Court, which, as a~~may

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~~(DEBTORS-IN-POSSESSION)~~

ITEM 1A. RISK FACTORS (CONTINUED)

~~court of equity,~~make to the organizational structure to adjust to changing circumstances. Any potential delays in adopting our management incentive plan and other executive benefits and compensation may ~~exercise substantial discretion,~~make it difficult to retain key personnel and we may ~~choose not~~need to ~~confirm the Proposed Plan. Bankruptcy Code Section 1129 requires, among~~enter into retention or other ~~things, a showing~~arrangements that ~~confirmation of the Proposed Plan will~~could be costly to maintain. If executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, we may not be ~~followed by liquidation or the need for further financial reorganization for us,~~able to replace them in a timely manner and ~~that the value of distributions to dissenting holders of claims and interests will not be less than the value such holders would receive if~~ we the Debtors, liquidated under Chapter 7 of the Bankruptcy Code. Although we believe that the Proposed Plan will satisfy such tests, there can be no assurance that the Bankruptcy Court will reach the same conclusion or that modifications to the Proposed Plan will not be required for confirmation or that such modifications would not necessitate re-solicitation of votes.could experience significant declines in productivity.

Our ~~post-bankruptcy capital structure is yet~~ability to utilize our net operating loss carryforwards (“NOLs”) may be ~~confirmed, and any changes to our capital structure may have~~limited as a ~~material adverse effect on existing debt and equity security holders.~~

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

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

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

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

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

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~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

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

In ~~addition, the Proposed Plan relies upon financial projections. Financial forecasts are necessarily speculative, and it is likely that one or more~~general, Section 382 of the ~~assumptions and estimates that are~~Internal Revenue Code (“IRC”) of 1986, as amended, provides an annual limitation with respect to the ~~basis~~ability of ~~these financial forecasts will not be accurate. In our case, the forecasts will be even more speculative than normal, because they involve fundamental changes~~a corporation to utilize its tax attributes, as well as certain built-in-losses ("BILs"), against future taxable income in the ~~nature~~event of ~~our capital structure. Additionally,~~a change in ownership. Emergence from Chapter 11 bankruptcy proceedings resulted in a change in ownership for purposes of the IRC Section 382. The Company analyzed alternatives available within the IRC to taxpayers in Chapter 11 bankruptcy proceedings in order to minimize the impact of the ~~COVID-19 pandemic~~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 ~~travel industry in general,~~benefit of such NOLs and ~~on us, make it even more challenging than usual~~BILs. Similar rules and limitations may apply for state income tax purposes.

Risks Related to ~~develop forecasts on business. Accordingly, we expect that~~ our actual financial condition and results of operations will differ, perhaps materially, from what we have anticipated. Consequently, there can be no assurance that the results or developments contemplated by any plan of reorganization we may implement will occur or, even if they do occur, that they will have the anticipated effects on us and our subsidiaries or our businesses or operations. The failure of any such results or developments to materialize as anticipated could materially adversely affect the successful implementation of the Proposed Plan.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 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 industry and government entities are unsuccessful, there may be further delays in new vehicle production. Consequently, there is no guarantee that we can purchase a sufficient number of new vehicles at competitive prices and on competitive terms and conditions. If we are unable to obtain a sufficient supply of new vehicles, or if we obtain less favorable pricing and other terms during the acquisition of vehicles and are unable to recover from the increased costs then our results of operations, financial condition, liquidity and cash flows may be materially adversely affected. If we are unable to purchase new vehicles at competitive prices, increased maintenance costs in relation to our existing fleet may put further pressure on our results of operations and financial condition.

The continued uncertainty about the duration of the negative impact from COVID-19 in our industry may disrupt our employee retention and talent management strategies and affect our business operations.

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

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

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ITEM 1A. RISK FACTORS (CONTINUED)

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

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

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~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~(DEBTORS-IN-POSSESSION)~~

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

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

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 typically use LIBOR as a reference rate in various of our financing transactions such that the 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 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 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 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 become accepted alternatives to LIBOR, it is impossible to predict the effect of any such alternatives on our liquidity. However, if LIBOR ceases to exist, we may need to renegotiate certain of our financing agreements that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established. As of June 30, 2021, we had $4.6 billion in outstanding indebtedness tied to LIBOR. Additionally, these changes may have an impact on the value of or interest earned on any LIBOR-based marketable securities, fleet leases, loans and derivatives that are included in our financial assets and 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:	~~May 7,~~August 9, 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










~~10.1~~2.1	Hertz Holdings Hertz	Plan Support Agreement, dated as of April 3, 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 7, 2021).
~~10.2~~2.2	Hertz Holdings Hertz	Equity Purchase and 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 Global Holdings, Inc. (File No. 001-37665), as filed on April 7, 2021).
~~10.3~~2.3	Hertz Holdings Hertz	Joinder Agreement, dated as of April 14, ~~2021(~~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).
222.4	~~Hertz Holdings~~	~~List~~Plan Support Agreement, dated as of ~~Guarantor Subsidiaries~~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 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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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	4146
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6675
ITEM 4.	Controls and Procedures	6675
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	6878
ITEM 1A.	Risk Factors	6878
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7180
ITEM 3.	Defaults Upon Senior Securities	7180
ITEM 5.	Other Information	7180
ITEM 6.	Exhibits	7181
SIGNATURE		7282
EXHIBIT INDEX		7383


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