What changed in this filing

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Item 1A. Risk Factors

2026-02-19 compared with 2025-02-14 · 51 added, 39 removed, 287 unchanged (24% of the section changed)

32 unchanged sentences

While we source our fleet purchases from a wide range of auto manufacturers, we are exposed to risk to the extent that any auto manufacturer significantly curtails production.

Such production may be curtailed as a result of a wide range of factors, including impacts of a pandemic and supply chain impacts, including as a result of tariffs and shortages of parts, which have impacted certain manufacturers in the past.

We are also exposed to risk to the extent that any auto manufacturer increases the cost of vehicles, including as a result of inflation, tariffs, labor shortages or disruptions, or supply chain disruptions, or declines to sell vehicles to us on terms or at prices consistent with past practice.

Such production may be curtailed as a result of a wide range of factors, including impacts of a pandemic and supply chain impacts, including as a result of tariffs and shortages of parts such as semiconductor parts utilizing rare earth minerals, which have impacted certain manufacturers in the past.

We are also exposed to risk to the extent that any auto manufacturer increases the cost of vehicles, including as a result of inflation, trade disputes, tariffs, labor shortages or disruptions, or supply chain disruptions, or declines to sell vehicles to us on terms or at prices consistent with past practice.

Should any of these risks occur, we may be unable to obtain a sufficient number of vehicles to operate our business without significantly increasing our fleet costs or the mileage of the vehicles in our fleet, or reducing our volumes.

We face risks related to safety recalls affecting our vehicles.

Our vehicles may be subject to safety recalls by their manufacturers, which could have an adverse impact on our business when we remove recalled vehicles from our rentable fleet.

Our vehicles have in the past and may in the future be subject to safety recalls by their manufacturers.

Such recalls have an adverse impact on our business when we remove recalled vehicles from our rentable fleet.

We can neither control nor predict the number of vehicles that will be subject to manufacturer recalls in the future.

Recalls often require us to retrieve vehicles from customers and/or hold vehicles from rental or sale until we can arrange for the repairs described in the recalls to be completed.

As such, recalls can increase our costs, negatively impact our revenues and/or reduce our fleet utilization.

If a large number of vehicles were to be the subject of one or more recalls, or if needed replacement parts were not in adequate supply, we may be unable to utilize recalled vehicles for a significant period of time.

Recalls increase our costs, negatively impact our revenues and reduce our fleet utilization.

If a large number of vehicles were to be the subject of one or more recalls, which has occurred in the past, or if needed replacement parts are not readily available to us, we may be unable to utilize recalled vehicles for a significant period of time.

We may also be subject to material liability claims or regulatory action related to vehicles subject to a safety recall.

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When travel demand or economic conditions in the United States, Europe and/or worldwide weaken, our financial condition and results of operations are often adversely impacted.

Any significant airline capacity reductions, airfare or related fee increases, reduced flight schedules, or any events that disrupt or reduce business or leisure air travel or weaken travel demand and tourism, globally or in the key areas in which we operate, such as work stoppages, military conflicts, terrorist incidents, natural disasters, disease epidemics, or the response of governments to any such events, could have an adverse impact on our results of operations.

Any significant airline capacity reductions, airfare or related fee increases, reduced flight schedules, or any events that disrupt or reduce business or leisure air travel or weaken travel demand and tourism, globally or in the key areas in which we operate, such as work stoppages, government shutdowns, military conflicts, terrorist incidents, natural disasters, disease epidemics, or the response of governments to any such events, could have an adverse impact on our results of operations.

For example, events of a global nature such as the COVID-19 pandemic have had, and may in the future have, material impacts on the Company.

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Our licensees’ vehicle rental operations may also be impacted by these risks, which in turn could impact the amount of royalty payments they make to us.

Ongoing military conflicts, including in Eastern Europe, are causing uncertainty that may have an adverse impact on our business, financial condition and results of operations.

The world economy and markets are experiencing volatility and disruption from ongoing military conflicts, including in Eastern Europe, the length and impact of which are highly unpredictable.

Ongoing military conflicts, including in the Middle East and Eastern Europe, are causing uncertainty that may have an adverse impact on our business, financial condition and results of operations.

The world economy and markets are experiencing volatility and disruption from ongoing military conflicts, including in the Middle East and Eastern Europe, the length and impact of which are highly unpredictable.

These conflicts have led to, and could in the future lead to, significant volatility in our costs, including fuel and fleet costs, including as a result of sanctions or any embargoes on oil sales imposed on or by the Russian government;

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We believe that the vehicle industry will continue to experience significant change in the coming years, in particular as it relates to vehicle electrification.

Worldwide demand for electric and hybrid vehicles continues to increase, and manufacturers continue to invest more time and cost into producing these types of vehicles in an effort to reduce fuel consumption and greenhouse gas emissions, as mandated by various governmental standards and regulations.

If we are not adequately prepared to meet consumer demand for electric, hybrid and autonomous vehicles as such demand develops, including if we are unable to attain an optimal and consistently reliable charging infrastructure and systems, which will require substantial capital investment, or if consumer demand for electric, hybrid and autonomous vehicles fails to meet our expectations, including due to slower or inadequate investments in charging infrastructure by third parties, changes in governmental regulations, rebates and subsidies, or changes in consumer sentiment, our financial condition or results of operations could be adversely impacted.

If we are not adequately prepared to meet consumer demand for electric, hybrid and autonomous vehicles as such demand develops, including if we are unable to attain an optimal and consistently reliable charging infrastructure and systems, which will require substantial capital investment, or if consumer demand for electric, hybrid and autonomous vehicles fails to meet our expectations, including due to slower or inadequate investments in charging infrastructure by third parties, changes in governmental regulations, tax credits, rebates and subsidies, or changes in consumer sentiment, our financial condition or results of operations could be adversely impacted.

Additionally, federal and state administrations have introduced additional uncertainty for the electric vehicle (“EV”) industry.

Any unavailability, reduction or elimination of government and economic incentives, including tax credits, because of policy changes, or other reasons, may result in the diminished value of our EV fleet.

Additionally, federal, state, and local laws may impose additional barriers to EV adoption, including additional costs.

For example, many states have enacted or proposed laws imposing additional registration fees for certain hybrids and EVs to support transportation infrastructure, such as highway repairs and improvements, which have traditionally

been funded through federal and state gasoline taxes.

These policy changes may be implemented more rapidly than we are able to change the composition of our fleet.

Any of the foregoing, and any resulting mismatches between the vehicles in our fleet, consumer preferences and government policies, could materially and adversely affect the growth of the EV market and value of EVs and our financial condition and results of operations.

We face risks related to liability and insurance.

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Changes in exchange rates among these currencies and the U.S.

dollar have affected, and will continue to affect, among other things, the recorded levels of our assets and liabilities in our Consolidated Financial Statements.

dollar have affected, and

will continue to affect, among other things, the recorded levels of our assets and liabilities in our Consolidated Financial Statements.

While we take steps to manage our currency exposure, such as currency hedging, we may not be able to effectively limit our exposure to intermediate or long-term movements in currency exchange rates, which could adversely impact our financial condition or results of operations.

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For example, to decrease our fleet age for competitive reasons, in the fourth quarter of 2024 we accelerated our plans with respect to certain fleet rotations and shortened the useful life associated with such vehicles, which resulted in an impairment charge.

In addition, during the fourth quarter of 2025, in conjunction with the Interpace Ventures transaction, we shortened the useful life associated with certain EV rental car vehicles, which resulted in an impairment charge.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” and Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

RISKS RELATED TO LEGAL, REGULATORY AND ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (“ESG”) RELATED MATTERS

RISKS RELATED TO LEGAL, REGULATORY AND CORPORATE RESPONSIBILITY RELATED MATTERS

Costs associated with lawsuits, investigations or increases in legal reserves that we establish based on our assessment of contingent liabilities may have an adverse effect on our results of operations.

Our global operations expose us to various claims, lawsuits and other legal proceedings that arise in and outside of the ordinary course of our business in the countries in which we operate.

We are or may be subject to complaints and/or litigation involving our customers, licensees, employees, independent operators and others with whom we conduct business and other third parties, including claims for bodily injury, death and property damage related to use of our vehicles or our locations, or claims based on allegations of discrimination, misclassification as exempt, wage and hour pay disputes or allegations related to our business practices, and various other claims.

We could be subject to substantial costs and/or adverse outcomes from such claims, which could have a material adverse effect on our financial condition, cash flows or results of operations.

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Our compliance with existing or future environmental laws and regulations may, however, require material expenditures by us or otherwise have an adverse impact on our financial condition or results of operations.

Governments are likely to continue to pursue measures related to climate change and greenhouse gas emissions, including vehicle travel restrictions.

Governments may continue to pursue measures related to climate change and greenhouse gas emissions, including vehicle travel restrictions.

Should rules establishing limitations on greenhouse gas or other emissions or rules imposing fees on entities deemed to be responsible for greenhouse gas emissions, or rules establishing bans on diesel or fuel vehicles from entering certain locations become effective in the countries in which we operate, demand for our services could be affected, our fleet and/or other costs could increase, and our business could be adversely impacted.

We face risks related to ESG matters.

The growing focus on climate change, heightened societal expectations for companies to address environmental and social matters, and the proliferation of ESG related regulations and laws relating to disclosures and otherwise, both domestically (including in California) and globally (especially in the European continent) pose risks to our business.

We face risks related to Corporate Responsibility matters.

Climate change, societal expectations for companies to address environmental and social matters, and the changing public interest and regulations and laws relating to Corporate Responsibility matters and disclosures and otherwise, both domestically (including in California) and globally (especially in the European continent) pose risks to our business.

These developments could lead to increased operational and compliance costs, shifts in consumer and customer preferences toward substitute products, reduced demand for our offerings, and potential impacts on profitability.

Additionally, these factors, as well as our action or inaction with respect to ESG matters, may result in heightened regulatory or public scrutiny, increased litigation, reputational damage, and adverse effects on our revenue, stock price and/or access to capital markets.

We have developed certain initiatives, goals and practices relating to ESG matters.

Additionally, these factors, as well as our action or inaction with respect to Corporate Responsibility matters, may result in heightened regulatory or public scrutiny, increased litigation, reputational damage, and adverse effects on our revenue, stock price and/or access to capital markets.

We have developed certain initiatives, goals and practices relating to Corporate Responsibility matters.

We may not be successful in implementing these initiatives, goals and practices, including due to factors beyond our control, and even if successful, they may not achieve our desired or expected outcomes.

If our ESG initiatives, goals, and practices do not meet our expectations, those of our investors or other stakeholders, or requirements of local rules and regulations, each of which continue to evolve, we may incur additional costs, and our brand, reputation and results of operations and financial condition may be adversely impacted.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings and investment community divestment initiatives may lead to negative publicity or investor sentiment toward us and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

If our Corporate Responsibility initiatives, goals, and practices do not meet our expectations, those of our investors or other stakeholders, or requirements of local rules and regulations, each of which continue to evolve, we may incur additional costs, and our brand, reputation and results of operations and financial condition may be adversely impacted.

In addition, federal, state and local regulatory authorities, private organizations and individuals have challenged companies’ approaches to Corporate Responsibility issues and may challenge ours, including by alleging that we failed in our efforts or should not have undertaken such efforts, in the manner we have done so or at all.

Any of the foregoing could lead to reputational harm.

We face risks related to franchising or licensing laws and regulations.

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Our vehicle rental licensee and dealer locations are independently owned and operated.

We also operate many of our Company-owned locations through agreements with independent operators, which are third-party independent contractors who receive commissions to operate such locations.

We also operate many of our Company-owned locations through agreements with independent operators, which are third-party

independent contractors who receive commissions to operate such locations.

We also enter into service contracts with various third-party vendors that provide services for us or in support of our business.

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Regulators, courts or others may seek to hold us responsible for the actions of, or failures to act by, third-party operators or their employees based on theories of vicarious liability, negligence, joint operations or joint employer liability.

Although we actively monitor the operations of these third-party operators, and under certain circumstances have the ability to terminate their agreements for failure to adhere to contracted

operational standards, we are unlikely to detect all misconduct or noncompliance by a third-party operator or its employees.

Although we actively monitor the operations of these third-party operators, and under certain circumstances have the ability to terminate their agreements for failure to adhere to contracted operational standards, we are unlikely to detect all misconduct or noncompliance by a third-party operator or its employees.

It is our policy to vigorously seek to be dismissed from any claims involving third-party operators and to pursue indemnity for any adverse outcomes that affect the Company.

Failure of third-party operators to comply with laws and regulations or our operational standards, or our inability to be dismissed from claims against our third-party operators, may expose us to liability, damages and negative publicity that may damage our brand and reputation and adversely affect our financial condition or results of operations.

We face risks associated with changes in tax laws.

We face risks associated with changes in tax laws, including the expiration of tax credits.

The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) eliminated the use of like-kind exchange for personal property and allowed for full expensing of qualified property purchases through 2022.

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The effect of the repeal of the like-kind exchange treatment for vehicle sales has been largely offset through 2022 by the availability of full expensing for certain business assets (including our vehicles) in the year placed in service.

During 2023, the full expensing provision started to phase-out ratably by 20% each year between 2023 and 2027.

During 2023, the full expensing provision started to phase-out ratably by 20% each year;

however, in July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, making permanent key provisions of the Tax Act, including full expensing for qualified property, thereby eliminating the scheduled phase-out.

states have modified their tax statutes as a result of the Tax Act, and such state legislation does not allow the use of full expensing benefits for state tax purposes, which negatively impacts our tax liability in such states.

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Therefore, we cannot offer assurance that the benefits from the expected tax deductions will continue.

The Inflation Reduction Act of 2022 (the “IRA”) includes a 15% corporate alternative minimum tax on certain large corporations and a 1% excise tax on certain corporate stock repurchases.

The impact on the Company of these provisions, which became effective on January 1, 2023, will depend on several factors, including recently released and forthcoming interpretive regulatory guidance.

The Inflation Reduction Act of 2022 (the “IRA”) included a 15% corporate alternative minimum tax on certain large corporations and a 1% excise tax on certain corporate stock repurchases.

The impact on the Company of these provisions, which became effective on January 1, 2023, will depend on several factors, including recently released and forthcoming interpretive regulatory guidance, as well as recent legislative changes, such as those implemented under the OBBBA.

The Company continues to review and assess the provisions of the IRA, and its potential impact on our financial condition, results of operations, liquidity, and cash flows.

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The Company continues to closely monitor any such developments and guidance issued to determine any impact on our effective tax rate, cash tax obligations and operations.

Additionally, certain tax credits and other incentives for EVs that have been available in the past have been modified or have been phased out, which may have an adverse impact on demand for EVs.

For example, the OBBBA, which eliminated, limited or phased out certain tax credits that had previously provided significant benefits to lessees and purchasers of EVs and added new eligibility requirements on manufacturers to continue claiming tax credits on EV components.

It also eliminated certain penalties for noncompliance with certain fuel efficiency standards and introduced certain key tax law modifications.

A reduction in value of the EV market generally may have an adverse effect our financial condition, results of operations, liquidity, and cash flows.

See “Risks Related to the Nature of Our Business – We face risks related to vehicle electrification.”

RISKS RELATED TO OUR CAPITAL STRUCTURE AND INDEBTEDNESS

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and consolidate or merge with or into, or sell substantially all of our assets to, another person.

These covenants and provisions also may limit our

ability to respond to adverse changes in general economic, industry and competitive conditions, as well as changes in government regulation and changes to our business.

These covenants and provisions also may limit our ability to respond to adverse changes in general economic, industry and competitive conditions, as well as changes in government regulation and changes to our business.

Our failure to comply with these restrictive covenants and provisions, if not waived, would cause a default under the applicable debt agreement and could result in a cross-default under several of our other debt obligations, including our asset-backed debt facilities.

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If we purchase additional shares of our common stock under the Share Repurchase Program, the percentage of our outstanding common stock owned by SRS Investment Management, LLC and its affiliates (“SRS”) may increase, even without further action by SRS.

Under the terms of the Fourth Amended and Restated Cooperation Agreement between the Company and SRS, SRS has committed, with respect to shares of common stock SRS holds in excess of 35% of the Company’s outstanding common stock, to exercise its voting rights in the same proportion in which other shares of common stock are voted.

Under the terms of the Fourth Amended and Restated Cooperation Agreement between the Company and SRS (as amended from time to time), SRS has committed, with respect to shares of common stock SRS holds in excess of 45% of the Company’s outstanding common stock, to exercise its voting rights in the same proportion in which other shares of common stock are voted.

Notwithstanding this commitment, the ownership by SRS of more than 50% of the Company’s outstanding common stock could trigger, or increase the likelihood that we trigger, certain change in control provisions in the indentures governing our senior notes.

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At times, competitors may adopt service names similar to ours, thereby potentially impeding our ability to build brand identity and possibly leading to confusion in the marketplace.

In addition, we have been subject to, and from time to time in the future may be subject to, trade name or trademark infringement claims brought by owners

of other trademarks or names.

In addition, we have been subject to, and from time to time in the future may be subject to, trade name or trademark infringement claims brought by owners of other trademarks or names.

From time to time, we have acquired or attempted to acquire Internet domain names held by others when such names have caused consumer confusion or had the potential to cause consumer confusion.

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Such a failure or interruption, or a major disruption, could cause a loss of reservations, interfere with our fleet management, slow rental and sales processes, create negative publicity that damages our reputation or otherwise adversely impacts our ability to manage our business effectively.

We may experience system interruptions or disruptions for a variety of reasons, including from network failures, power outages, cyber-attacks, human error or misuse, software errors, an unusually high volume of visitors attempting to access our systems, or other events such as fire, explosions, earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts.

We have in the past and may in the future experience system interruptions or disruptions for a variety of reasons, including from network failures, power outages, cyber-attacks, human error or misuse, software errors, an unusually high volume of visitors attempting to access our systems, or other events such as fire, explosions, earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts.

Because we are dependent in part on independent third parties for the implementation and maintenance of certain aspects of our systems and because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, or at all.

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As cybersecurity threats become more frequent, intense, and sophisticated, costs of proactive defense measures may increase.

Third parties may have the technology or expertise to breach the security of our systems and data and our security measures may not prevent or timely detect physical security or cybersecurity breaches, which could result in substantial harm to our business, our reputation or our results of operations.

Third parties may have the technology or expertise to breach the security of our systems and data and our security measures may not prevent or timely detect physical security or cybersecurity

breaches, which could result in substantial harm to our business, our reputation or our results of operations.

We rely on encryption and/or authentication technology licensed from and, at times, administered by independent third parties to secure transmission of confidential information, including credit card numbers and other customer personal information.

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Additionally, if a third-party service provider on which we rely experiences a breach, we may not learn of such breach in a timely manner, or at all, which may inhibit our ability to mitigate its impacts, and exacerbate the risks described in this paragraph.

In addition, anyone who is able to circumvent our security measures or gain unauthorized access to our systems or information or those of our third-party service providers despite such security measures, could misappropriate proprietary information or cause interruptions in our operations.

In addition, anyone who is able to circumvent our security measures or gain unauthorized access to our systems or information or those of our third-party service providers despite such security measures, have in the past misappropriated, and could in the future misappropriate, proprietary information or cause interruptions in our operations.

Cybersecurity incidents that we have experienced in the past and may experience in the future may be caused by malicious third parties using sophisticated, targeted methods to circumvent firewalls, encryption, and other security defenses, and could include hacking, viruses, malicious software, ransomware, phishing attacks, denial of service attacks and other attempts to capture, disrupt or gain unauthorized access to data, all of which are rapidly evolving.

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Any successful efforts by individuals to infiltrate, break into, disrupt, damage or otherwise steal from the Company’s, its licensees’ or its third-party service providers’ security or information systems could damage our reputation and expose us to increased cybersecurity protection costs, litigation or other liability that could adversely impact our financial condition or results of operations.

A cybersecurity breach resulting in the unauthorized use or disclosure of certain personal information could put

individuals at risk of identity theft and financial or other harm and result in costs to the Company in investigation, remediation, legal defense and in liability to parties who are financially harmed.

Cybersecurity breaches resulting in the unauthorized use or disclosure of certain personal information create risk of identity theft, financial or other harm and costs to the Company in investigation, remediation, legal defense and in liability to parties who are financially harmed.

Failure to appropriately address these issues could also give rise to potentially material legal risks and liabilities.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors