What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-02-12 compared with 2023-02-07 · 278 added, 390 removed, 515 unchanged (56% of the section changed)

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

As of January 26, 2023, there were 875 holders of record of Hertz Holdings common stock.

Hertz Holdings' common stock and Public Warrants trade on The Nasdaq Global Select Market ("Nasdaq") under the symbols "HTZ" and "HTZWW," respectively.

As of February 7, 2024, there were 863 holders of record of Hertz Holdings' common stock.

Hertz Holdings paid no cash dividends on its common stock in 2023 or 2022, and it does not expect to pay dividends on its common stock for the foreseeable future.

Since Hertz Holdings does not conduct business itself, any dividends on, and repurchases of, its common stock must be funded using dividends from Hertz, amounts borrowed under a master loan agreement with Hertz or independent borrowings.

The credit agreements governing Hertz's First Lien Credit Facilities restrict Hertz's ability to make dividends and certain payments, including payments to Hertz Holdings to fund dividends on Hertz Holdings' common stock or for share repurchases.

Nasdaq Listing

On November 8, 2021, reorganized Hertz Global successfully completed the registration of its new common stock and Public Warrants with the SEC for a public offering by certain selling stockholders pursuant to a Registration Statement on Form S-1.

On November 9, 2021, reorganized Hertz Global's common stock and Public Warrants began trading on The Nasdaq Global Select Market ("Nasdaq") under the trading symbols "HTZ" and "HTZWW," respectively.

In conjunction with the Nasdaq listing, certain selling stockholders of Hertz Global offered and sold 44,520,000 shares of Hertz Global's common stock to the public.

Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate purchase price of approximately $300 million.

This amount is included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2022 and 2021 under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report.

Since Hertz Holdings does not conduct business itself, any dividends on, and repurchases of, its common stock must be funded using dividends or amounts borrowed from Hertz or independent borrowings.

The credit agreements governing Hertz's First Lien Credit Facilities and the indenture governing Hertz's Senior Notes Due 2026 and Senior Notes Due 2029 provide conditions that limit when Hertz can make dividends and certain other restricted payments, including restrictions for distributions to Hertz Holdings used to pay dividends on Hertz Holdings' common stock.

Repurchases of Equity Securities

Share Repurchase Programs for Common Stock

In November 2021, Hertz Global's Board of Directors approved a share repurchase program that authorized the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock (the "2021 Share Repurchase Program").

During the second quarter of 2022, the Company completed the 2021 Share Repurchase Program by repurchasing 80,677,021 shares of Hertz Global's common stock during the first and second quarters of 2022 at an average share price of $19.74 for an aggregate purchase price of $1.6 billion.

In November 2021, Hertz Global's independent Audit Committee recommended, and its Board approved, a share repurchase program that authorized the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock (the "2021 Share Repurchase Program"), which was announced on November 29, 2021.

In 2022, the Company completed the 2021 Share Repurchase Program by repurchasing 80,677,021 shares of Hertz Global's common stock during the first half of 2022 at an average share price of $19.74 for an aggregate purchase price of $1.6 billion.

Under the completed 2021 Share Repurchase Program, a total of 97,783,047 shares of Hertz Global common stock were repurchased for an aggregate purchase price of $2.0 billion.

In June 2022, Hertz Global's Board of Directors approved a new share repurchase program (the "2022 Share Repurchase Program") that authorized additional repurchases of up to an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock.

Between inception and December 31, 2022, a total of 47,303,009 shares of Hertz Global's common stock were repurchased under the 2022 Share Repurchase Program at an average share price of $17.64 for an aggregate purchase price of $835 million .

Between January 1, 2023 and January 26, 2023, a total of 1,079,647 shares of Hertz Global's common stock were repurchased under the 2022 Share Repurchase Program at an average share price of $16.51 resulting in an aggregate purchase price of $18 million.

In June 2022, Hertz Global's independent Audit Committee recommended, and its Board approved, a new share repurchase program (the "2022 Share Repurchase Program") that authorized additional repurchases of up to an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock.The 2022 Share Repurchase Program, announced on June 15, 2022, has no initial time limit, does not obligate Hertz Global to acquire any particular amount of common stock and can be discontinued at any time.

As of December 31, 2023, approximately $874 million remains available under the 2022 Share Repurchase Program.

Between inception and December 31, 2023, a total of 66,684,169 shares of Hertz Global's common stock were repurchased in open-market transactions under the 2022 Share Repurchase Program at an average share price of $16.88 for an aggregate purchase price of $1.1 billion.

There were no share repurchases after December 31, 2023 through the date of the filing of this 2023 Annual Report.

Any future repurchases will be made at the discretion of Hertz Global's management through a variety of methods, such as open-market transactions (including pre-set trading plans pursuant to Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

There can be no assurance as to the timing or number of any share repurchases.

HERTZ GLOBAL HOLDINGS, INC.

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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued)

Any repurchases are made at the discretion of management and may be executed through a variety of methods, such as open-market transactions (including pre-set trading plans pursuant to Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

The 2022 Share Repurchase Program has no initial time limit, does not obligate us to acquire any particular amount of common stock and can be discontinued at any time.

There can be no assurance as to the timing or number of shares of any future repurchases.

The following table provides a breakdown of our equity security repurchases during the fourth quarter of fiscal year 2023.

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The graph that follows compares the cumulative total stockholder return on Hertz Holdings common stock with the Russell 1000 Index and the Morningstar Rental & Leasing Services Industry Group.

The Russell 1000 Index is included because it is comprised of the 1,000 largest publicly traded issues.

The Russell 1000 Index is included because it is comprised of the 1,000 largest publicly traded issuers.

The Morningstar Rental & Leasing Services Industry Group is a published, market capitalization-weighted index representing stocks of companies, including Hertz Holdings, that rent or lease various durable goods to the commercial and consumer market including vehicles and trucks, medical and industrial equipment, appliances, tools and other miscellaneous goods.

The results are based on an assumed $100 invested on November 9, 2021 (the first day of trading on Nasdaq following Hertz

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued)

Global's emergence from bankruptcy and its Nasdaq listing), at the market close, through December 31, 2022.

The results are based on an assumed $100 invested on November 9, 2021 (the first day of trading pursuant to a registration statement on Form S-1), at the market close, through December 31, 2023.

Share price performance presented below is not necessarily indicative of future results.

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Rental Car Intermediate Holdings, LLC, which is wholly-owned by Hertz Holdings, owns all of the outstanding common stock of Hertz.

The credit agreements governing Hertz's First Lien Credit Facilities restrict Hertz's ability to make dividends and certain payments, including payments to Hertz Holdings for dividends on Hertz Holdings' common stock or for share repurchases.

Following receipt of consent obtained from the lenders of Hertz's First Lien Credit Facilities to permit the retirement of preferred stock, Hertz paid dividends to Hertz Holdings of $2.5 billion in 2022 and 2021 to help fund common stock and preferred stock repurchases as further disclosed in Note 17, "Equity – Hertz Global" to the Notes to its consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Hertz did not pay dividends in 2020 to Hertz Holdings.

Not applicable.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (Continued)

Hertz paid dividends to Hertz Holdings of $321 million and $2.5 billion in 2023 and 2022, respectively, to help fund common stock repurchases, as further disclosed in Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global" in Part II, Item 8 of this 2023 Annual Report.

The credit agreements governing Hertz's First Lien Credit Facilities provide conditions that limit when Hertz can make dividends and certain other restricted payments, including restrictions for distributions to Hertz Holdings used to pay dividends on Hertz Holdings' common stock.

Not applicable.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Our actual results may differ materially from those contained in or implied by any forward-looking statements.

You should read the following MD&A together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors,” Item 1A, "Risk Factors,” and our consolidated financial statements and related notes included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data.”

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

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Adjusted EBITDA, the segment measure of profitability and accordingly a GAAP measure, is calculated exclusive of certain items which are largely consistent with those used in the calculation of Adjusted Corporate EBITDA.

• Vehicle Utilization – Effective in the first quarter of 2022, in connection with the appointment of the new CEO (who serves as our Chief Operating Decision Maker) and arising from significantly increased activity in vehicle dispositions, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization.

Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days.

Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period.

Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels.

We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity.

Accordingly, prior periods have been restated to conform with the revised definition.

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

Higher Vehicle Utilization means more vehicles are being utilized to generate revenues.

• Depreciation Per Unit Per Month – important key metric to management and investors as depreciation of revenue earning vehicles and lease charges is one of our largest expenses for the vehicle rental business and is driven by the number of vehicles, expected residual values at the expected time of disposal and expected hold period of the vehicles.

Depreciation Per Unit Per Month is reflective of how we are managing the costs of our vehicles and facilitates a comparison with other participants in the vehicle rental industry.

• Total Revenue Per Transaction Day ("Total RPD," also referred to as "pricing") – important key metric to management and investors as it represents a measurement of the changes in underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control.

Effective in the third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues to better align with current industry practice, and accordingly, prior periods have been restated to conform with the revised definition.

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

• Total Revenue Per Unit Per Month ("Total RPU") – important key metric to management and investors as it provides a measure of revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased ("Average Rentable Vehicles").

Effective in the third quarter of 2021, we revised our calculation of Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice and effective in the first quarter of 2022, we revised to use Average Rentable Vehicles as the denominator in our calculation of Total RPU.

Average Rentable Vehicles excludes vehicles for sale on the Company’s retail lots or actively in the process of being sold through other disposition channels.

We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity.

There has been no change to revenue as used in the numerator of the calculation which includes vehicle rental and rental related revenues, licensee revenue and ancillary retail vehicle sales revenue.

Prior periods have been restated to conform with the revised definition.

Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels .

• Transaction Days – important key metric to management and investors as it represents the number of revenue generating days ("volume").

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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.

We continue to balance our mix of EVs, non-program vehicles 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 is focused on excellence in execution of our rental operations, electrification of the fleet, shared mobility, connected cars and selling vehicles from the fleet directly to consumers.

Our revenues are primarily derived from rental and related charges and consist of worldwide vehicle rental revenues from all company-operated vehicle rental operations and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees.

Also included are ancillary revenues associated with retail vehicle sales and certain royalty fees from our franchisees (such fees are approximately 2% of total revenues each period).

We previously had revenues from vehicle leasing and fleet management services by our Donlen business, which was sold on March 30, 2021, as further disclosed in Note 3, "Divestitures," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Our strategy is focused on excellence in execution of our rental operations, presenting distinct product offerings through each of our brands, building on our leadership in ride share and selling vehicles from the fleet directly to consumers.

Our revenues are primarily derived from rental and related charges and consist of worldwide vehicle rental revenues from all company-operated vehicle rental operations and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling and electric charging of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees.

Also included are collections from customers for vehicle damages, ancillary revenues associated with retail vehicle sales and certain royalty fees from our franchisees (such fees are approximately 2% of total revenues each period).

Our expenses primarily consist of:

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and other costs relating to the operation and rental of revenue earning vehicles, such as damage, maintenance and fuel costs;

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

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

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

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

• Interest expense, net.

To accommodate increased demand, we increase our available fleet and staff.

As demand declines, fleet and staff are decreased accordingly.

To accommodate increased demand, we seek to increase our available fleet and staff.

As demand declines, we seek to reduce fleet and staff accordingly.

As a result, we strive to maintain a flexible workforce, with a significant number of part-time and seasonal workers.

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.

We also maintain a flexible workforce, with a significant number of part-time and seasonal workers.

Certain operating expenses, including real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, and minimum staffing costs, remain fixed and cannot be adjusted for demand.

Chapter 11 and Emergence

In March 2020, the World Health Organization declared COVID-19 a pandemic, affecting multiple global regions.

In an effort to halt the spread of COVID-19, many governments around the world placed significant restrictions on travel, individuals voluntarily reduced their air and other travel in attempts to avoid the outbreak and many businesses announced closures and imposed travel restrictions.

On May 22, 2020, the Debtors filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court and on June 30, 2021, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11.

Our Reportable Segments

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• International RAC - Rental of vehicles, as well as sales of value-added services, in locations other than the U.S., Canada, Latin America and the Caribbean.

In the second quarter of 2021, as a result of the Donlen Sale, as further disclosed in Note 3, "Divestitures," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report, the All Other Operations reportable segment, which was primarily comprised of the Donlen business, was no longer deemed to be a reportable segment.

In the second quarter of 2021, as a result of the Donlen Sale, as further disclosed in Note 3, "Divestitures," in Part II, Item 8 of this 2023 Annual Report, the All Other Operations reportable segment, which was primarily comprised of the Donlen business, was no longer deemed to be a reportable segment.

In addition to the above reportable segments, we have corporate operations.

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Revenue earning vehicles used in our rental and leasing operations are recorded at cost, net of related discounts and incentives from manufacturers.

Holding periods typically range from six to thirty-six months.

Also included in

Holding periods typically range from six to sixty-six months.

Also included in revenue earning vehicles are vehicles placed on our retail lots for sale or actively in the process of being sold through other disposition channels.

Program vehicles are purchased under repurchase or guaranteed depreciation programs with vehicle manufacturers wherein the manufacturers agree to repurchase vehicles at a specified price or guarantee the depreciation rate on the vehicles during established repurchase periods, subject to, among other things, certain vehicle condition, mileage and holding period requirements.

Guaranteed depreciation programs guarantee the residual value of the program vehicle upon sale, subject to, among other things, certain vehicle condition, mileage and holding period requirements.

Program vehicles generally provide us with flexibility to increase or reduce the size of our fleet based on market demand.

Historically, when we have increased the percentage of program vehicles, the average age of our fleet has decreased, since the average holding period for program vehicles has historically been shorter than that for non-program vehicles.

When a revenue earning vehicle is acquired outside of a vehicle repurchase program, which is the case for the majority of our fleet at December 31, 2023, we estimate the period that we will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).

We also estimate the residual value of the applicable revenue earning vehicles at the expected time of disposal, considering factors such as make, model and options, age, physical condition, mileage, sale location, time of the year, channel disposition (e.g.,

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

revenue earning vehicles are vehicles placed on our retail lots for sale or actively in the process of being sold through other disposition channels.

Guaranteed depreciation programs guarantee the residual value of the program vehicle upon sale, subject to, among other things, certain vehicle condition, mileage and holding period requirements.

Program vehicles generally provide us with flexibility to increase or reduce the size of our fleet based on market demand.

When we increase the percentage of program vehicles, the average age of our fleet decreases since the average holding period for program vehicles is shorter than that for non-program vehicles.

When a revenue earning vehicle is acquired outside of a vehicle repurchase program, we estimate the period that we will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).

auction, retail, dealer direct), historical sales experience for similar vehicles, third-party expectations of resale value and market conditions.

The vehicle is depreciated using a rate based on these estimates.

Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and estimated future market conditions, their effect on residual values at the expected time of disposal and the estimated holding period of the vehicle.

Differences between actual residual values and those estimated result in an adjustment to depreciation upon disposition of the vehicle.

Differences between actual residual values (i.e., the ultimate sales price) and those estimated in our financial statements result in an adjustment to depreciation upon disposition of the vehicle.

Our depreciation of revenue earning vehicles and lease charges also includes costs associated with the disposal of vehicles and rents paid for vehicles leased.

We dispose of our non-program vehicles via auction, dealer direct wholesale channels, direct sales to third parties and retail channels.

Non-program vehicles disposed of through our retail locations allow us the opportunity for value-added revenue, such as warranty, financing and title fees.

Non-program vehicles disposed of through our retail locations allow us the opportunity for ancillary revenue, such as warranty, financing and title fees.

We periodically review and adjust the mix between program and non-program vehicles in our fleet based on contract negotiations and the economic environment pertaining to our industry in an effort to optimize the mix of vehicles.

Additionally, the use of program vehicles reduces the volatility associated with residual value estimation.

The use of program vehicles reduces the volatility associated with residual value estimation.

Chapter 11 and Emergence

On May 22, 2020, as a result of the impact from the COVID-19 global pandemic, the Debtors filed voluntary petitions for relief under Chapter 11 of the U.S.

Bankruptcy Code in the Bankruptcy Court.

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court and on June 30, 2021, the Plan of Reorganization became effective and the Debtors emerged from Chapter 11.

2023 Operating Overview

Effective in the first quarter of 2022, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization and Total RPU.

Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels.

We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity.

Accordingly, prior periods have been restated to reflect this change.

In December 2023, we identified a group of EVs (the "EV Disposal Group") that we desired to sell in response to management's determination that the supply of EVs exceeded customer demand, elevated EV damage and collision costs and a decline in EV residual values.

As a result, the EV Disposal Group, included in our Americas RAC segment, has been classified as held for sale as of December 31, 2023.

The carrying values of the vehicles included in the EV Disposal Group were written down to fair value less costs to sell and resulted in a write-down of $245 million for the year ended December 31, 2023.

See Note 4, "Revenue Earning Vehicles" in Part II, Item 8 of this 2023 Annual Report for further details.

The following charts provide the period-over-period change for several key factors influencing our results for each of the years ended December 31, 2023 , 2022 and 2021.

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

The following charts provide the period-over-period change for several key factors influencing our results for the years ended December 31, 2022 , 2021 and 2020.

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

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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.

Impact of COVID-19 on our Business Environment

Beginning in 2021, individuals across the globe increasingly gained access to COVID-19 vaccinations, particularly in the U.S.

During 2021 and continuing through 2022, many of the government-imposed restrictions have been lifted or eased, and travel, particularly leisure travel, has experienced a strong rebound.

However, there remains continued uncertainty about the impact on supply chain constraints resulting from the pandemic and other macroeconomic conditions.

Discussions regarding our results of operations, liquidity and capital resources for the year ended December 31, 2023 compared to the year ended December 31, 2022 are included within this MD&A.

Discussions of our results of operations, liquidity and capital resources for the year ended December 31, 2022 compared to the year ended December 31, 2021 can be found under Part II, Item 7 of our 2022 Form 10-K, which is available on the SEC's website (www.sec.gov) or indirectly through our website (www.hertz.com).

HERTZ GLOBAL HOLDINGS, INC.

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Direct vehicle and operating expenses 5,455 4,808 3,920 13 23

Depreciation of revenue earning vehicles and lease charges, net 701 497 2,030 41 (76)

Depreciation of revenue earning vehicles and lease charges, net 2,039 701 497 NM 41

Non-vehicle depreciation and amortization 149 142 196 4 (27)

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Interest expense, net:

159 284 455 (44) (38)

555 159 284 NM (44)

238 169 185 41 (9)

Interest expense, net 328 469 606 (30) (23)

Technology-related intangible and other asset impairments — — 213 — (100)

Write-off of intercompany loan — — 133 — (100)

Interest expense, net 793 328 469 NM (30)

Other (income) expense, net

12 2 (21) NM NM

Reorganization items, net — 513 175 (100) NM

(Gain) from the sale of a business — (400) — (100) NM

Income (loss) before income taxes 1,745 1,474 (2,183) 18 NM

Reorganization items, net — — 513 — (100)

Gain on sale of non vehicle assets (162) — — — —

(Gain) from the sale of a business — — (400) — (100)

Income (loss) before income taxes 123 1,745 1,474 (93) 18

Income tax (provision) benefit

329 (390) (318) NM 23

Net income (loss) 1,355 1,156 (1,855) 17 NM

Net income (loss) 452 1,355 1,156 (67) 17

Net (income) loss attributable to noncontrolling interests

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Net income (loss) attributable to Hertz

$ 1,355 $ 1,157 $ (1,846) 17 NM

$ 452 $ 1,355 $ 1,157 (67) 17

Adjusted Corporate EBITDA (a)

$ 2,305 $ 2,130 $ (995) 8 NM

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

$ 561 $ 2,305 $ 2,130 (76) 8

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

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

Total revenues increased $1.3 billion in 2022 compared to 2021 due primarily to an increase of $1.1 billion and $420 million in our Americas RAC and International RAC segments, respectively, partially offset by a decrease of $136 million in all other operations.

Americas RAC revenues increased due primarily to higher volume and pricing driven by growth in travel demand and higher pricing resulting from industry-wide supply chain constraints on vehicles.

Excluding an unfavorable $162 million impact of fx, revenues for our International RAC segment increased $582 million due primarily to higher pricing in most leisure categories and across the industry resulting from industry-wide supply chain constraints on vehicles and increased travel demand resulting from the easing of government-imposed travel restrictions.

The decrease in all other operations was the result of the Donlen Sale in 2021.

DOE increased $888 million in 2022 compared to 2021 due primarily to increases of $777 million and $123 million in our Americas RAC and International RAC segments, respectively.

The increase in DOE for our Americas RAC segment was due primarily to higher fleet-related costs driven by increased volume and fleet age, higher personnel costs and litigation settlements in 2022.

Excluding an unfavorable $86 million impact of fx, DOE for International RAC increased $209 million due primarily to higher volume driven by increased travel demand.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Depreciation of revenue earning vehicles and lease charges, net increased $203 million in 2022 compared to 2021 largely driven by our Americas RAC segment.

The increase of $210 million in our Americas RAC was due primarily to higher vehicle acquisition costs, partially offset by gains recognized on increased vehicle dispositions.

Non-vehicle depreciation and amortization decreased $53 million in 2022 compared to 2021 resulting primarily from fully depreciated intangible assets related to concession rights in our Americas RAC segment.

SG&A increased $271 million in 2022 compared to 2021 due primarily to increases of $168 million, $69 million and $45 million in our corporate operations, Americas RAC segment and International RAC segment, respectively.

The increase in our corporate operations was due primarily to non-cash stock-based compensation costs and bankruptcy claims.

SG&A in our Americas RAC segment increased as a result of increased advertising spend and personnel costs.

Excluding an unfavorable $20 million fx impact, SG&A in our International RAC segment increased $65 million due primarily to increased advertising spend and facility costs.

Vehicle interest expense, net decreased $125 million in 2022 compared to 2021 due primarily to $111 million of unrealized gains on interest rate caps primarily in our Americas RAC segment and the write-off in 2021 of capitalized fees with no comparable in 2022 primarily in our International RAC segment, partially offset by higher debt levels in our Americas RAC segment.

Non-vehicle interest expense, net decreased $16 million in 2022 compared to 2021 due primarily to lower average interest rates, partially offset by higher benchmark rates.

We had other expense of $2 million in 2022 compared to other income of $21 million in 2021.

Other income of $21 million in 2021 was comprised of gains relating to derivative instruments in our corporate operations, the gain on the sales of certain franchises in our Americas RAC segment and income from an equity investment in our corporate operations.

We incurred $513 million of net reorganization charges in 2021 in our corporate operations for professional fees and other costs associated with the Chapter 11 Cases, mainly 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.

Gain from the Donlen Sale of $400 million in 2021 resulting from the completion of the Donlen Sale in the first quarter of 2021 which was recorded in our corporate operations.

The effective tax rate in 2022 and 2021 was 22%.

We recorded a tax provision of $390 million and $318 million for 2022 and 2021, respectively.

The increase in the tax provision in 2022 compared to 2021 was driven by improvements in our financial performance in 2022, as well as tax benefits associated with the restructuring in Europe recognized in 2021, the impact of changes to state and foreign valuation allowances, and non-deductible bankruptcy costs incurred in 2021.

Year Ended December 31, 2021 Compared with Year Ended December 31, 2020

Total revenues increased $2.1 billion in 2021 compared to 2020 due primarily to an increase of $2.5 billion and $113 million in our Americas RAC and International RAC segments, respectively, partially offset by a decrease of $494 million in all other operations.

Americas RAC revenues increased due primarily to increased pricing resulting from growth in travel demand and industry-wide supply chain constraints on vehicles.

Excluding a $42 million impact of fx, revenues for our International RAC segment increased $71 million also due primarily to increased pricing resulting primarily from industry-wide supply chain constraints on vehicles, partially offset by lower volume.

The decrease in all other operations was the result of the Donlen Sale in the first quarter of 2021.

DOE increased $497 million in 2021 compared to 2020 due primarily to an increase of $540 million in our Americas RAC segment, partially offset by a decrease of $42 million in our International RAC segment.

The increase in DOE

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

for our Americas RAC segment was due primarily to higher volume, partially offset by lower fleet costs due to reduced fleet size and lower fixed costs resulting from cost-reduction initiatives.

Excluding the $30 million impact of fx, DOE for International RAC decreased $72 million due primarily to lower volume and lower fixed costs resulting from cost-reduction initiatives.

Depreciation of revenue earning vehicles and lease charges, net decreased $1.5 billion in 2021 compared to 2020 due primarily to decreases of $1.0 billion, $435 million, and $89 million in our Americas RAC segment, all other operations, and International RAC segment, respectively.

The decrease in our Americas RAC segment was due primarily to increasing residual values and longer vehicle holding periods resulting in an increase in vehicles that were fully depreciated and an increase in gains recognized on the disposition of vehicles.

The decrease in all 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 $95 million due primarily to right sizing of the fleet, supply chain constraints on vehicles and strength in residual values.

Non-vehicle depreciation and amortization decreased $29 million in 2021 compared to 2020 due primarily to lower depreciation expense resulting in part from the Lease Rejection Orders in our Americas RAC segment in 2020 and fully depreciated intangible assets related to concession rights.

SG&A increased $43 million in 2021 compared to 2020 due primarily to an increase of $81 million in our corporate operations due primarily to increased personnel costs, partially offset by decreases of $28 million and $9 million in our International RAC segment and all other operations, respectively.

Excluding a $6 million fx impact, SG&A in our International RAC segment decreased $34 million due primarily to lower professional fees and lower personnel costs, partially offset by higher marketing spend.

Vehicle interest expense, net decreased $171 million in 2021 compared to 2020 due primarily to lower average balances and lower average rates primarily in our Americas RAC segment.

Non-vehicle interest expense, net increased $34 million in 2021 compared to 2020 due primarily to higher amortization of capitalized deferred financing costs, higher letter of credit fees and higher average interest rates due primarily to the issuance of new unsecured senior notes in the fourth quarter of 2021, the issuance of the Term Loans in the second quarter of 2021 and 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 incurred charges of $213 million for impairment of intangible and other assets in 2020 due primarily to $124 million impairment of technology-related intangible assets and $69 million impairment of 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.

Additionally, we incurred a charge of $20 million for impairment of the Hertz tradename in our historical International RAC segment as a result of our annual testing of the recoverability of our indefinite-lived intangible assets.

We incurred a charge of $133 million in 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 $21 million in 2021 compared to other income of $9 million in 2020.

Other income in 2021 was comprised of gains relating to derivative instruments in our corporate operations, the gain on the sales of certain franchises in our Americas RAC segment and income from an equity investment in our corporate operations.

Other income of $9 million in 2020 was primarily comprised of a $20 million gain due to additional cash received from the sale of non-vehicle capital assets, primarily offset by $11 million in pension-related settlement charges.

We incurred $513 million of net reorganization charges in 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.

We incurred $175 million

Total revenues increased $686 million in 2023 compared to 2022 driven primarily by higher volume.

Americas RAC increased $443 million and International RAC increased $244 million, including a favorable $22 million fx impact in 2023.

DOE increased $646 million in 2023 compared to 2022, with increases of $502 million and $152 million in our Americas RAC and International RAC segments, respectively.

DOE in our Americas RAC segment increased due primarily to higher volume-driven costs as well as higher collision and damage costs, particularly within the EV fleet, partially offset by cost saving initiatives in 2023.

DOE in our International RAC segment, which included a favorable $11 million fx impact in 2023, increased primarily due to increased volume.

The completion of the sale of the EV Disposal Group is expected to have a positive impact on DOE in our Americas RAC segment in 2024, particularly later in the year as sales are completed.

Depreciation of revenue earning vehicles and lease charges, net increased $1.3 billion in 2023 compared to 2022, of which $1.2 billion is attributed to our Americas RAC segment.

The increase in our Americas RAC segment was due to several factors, primarily (i) reduced per unit gains on vehicle dispositions, (ii) an increase in Average Vehicles and (iii) a lower volume of vehicle dispositions.

The increase in Americas RAC was partially offset by longer vehicle holding periods.

Additionally, depreciation of revenue earning vehicles and lease charges, net increased

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

of net reorganization charges in 2020 in our corporate operations for professional fees and other costs associated with the Chapter 11 Cases.

We recognized a gain from the Donlen Sale of $400 million in 2021 resulting from the completion of the Donlen Sale in the first quarter of 2021 which was recorded in our corporate operations.

The effective tax rate in 2021 was 22% compared to 15% in 2020.

We recorded a tax provision of $318 million in 2021 compared to a tax benefit of $328 million in 2020.

The increase in the tax provision in 2021 compared to 2020 was driven by improvements in our financial performance in 2021, change in the mix of earnings and losses in jurisdictions in which no tax benefit can be recognized, non-deductible bankruptcy expenses, and reduced by the tax benefits of the European reorganization.

compared to 2022 due to the $245 million write-down of the carrying values of the EV Disposal Group resulting from its classification as held for sale in December 2023.

Depreciation of revenue earning vehicles and lease charges, net in our International RAC segment increased $116 million in 2023 compared to 2022 due primarily to higher vehicle acquisition costs, an increase in Average Vehicles and reduced per unit gains on vehicle dispositions, partially offset by a higher volume of vehicle dispositions in 2023.

Depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment is expected to be impacted in 2024 by several factors:

(i) lower per unit depreciation that will be incurred on the EV Disposal Group, (ii) a larger average fleet compared to that held in 2023, (iii) the intended sale of older vehicles during 2024 and (iv) an uncertain residual environment.

Non-vehicle depreciation and amortization increased $6 million in 2023 compared to 2022, primarily in our Americas RAC segment, and primarily due to incremental depreciation on completed location refurbishment projects and accelerated amortization on certain software assets.

SG&A in 2023 was essentially flat compared to 2022 with a decrease of $194 million of cost associated with our corporate operations, offset by increases of $150 million and $47 million in our Americas RAC and International RAC segments, respectively.

The decrease in cost associated with our corporate operations was due primarily to lower non-cash stock-based compensation costs, intercompany royalty assessment fees received from our International RAC segment, reduced bankruptcy claims and lower incentive compensation.

SG&A in our Americas RAC segment increased as a result of increased IT and personnel costs and higher advertising spend.

SG&A in our International RAC segment increased due primarily to intercompany royalty assessment fees paid to our corporate operations, partially offset by decreased incentive compensation and a reduction in litigation reserves.

Vehicle interest expense, net increased $396 million in 2023 compared to 2022 due primarily to higher average interest rates, which in part reflects reduced unrealized gains on interest caps in 2023, and higher debt levels resulting primarily by increased fleet levels.

The impact of higher interest rates and debt levels primarily impacted our Americas RAC segment as a result of higher benchmark rates on the HVF III 2021-A Notes and the issuance of the HVF III Series 2023 Notes.

Vehicle interest expense, net was also impacted by the unwind of certain of its interest rate caps in the first quarter of 2023 resulting in the realization of $88 million of previously unrealized gains, partially offset by a $98 million realized gain.

Non-vehicle interest expense, net increased $69 million in 2023 compared to 2022 due primarily to higher benchmark rates and higher debt levels resulting from the issuance of a new term loan in 2023, partially offset by interest income due to higher market rates.

Other expense increased $10 million in 2023 compared to 2022 due primarily to an increase in net periodic pension costs resulting from higher interest costs.

The effective tax rate in 2023 and 2022 was (268)% and 22%, respectively.

We recorded a tax benefit of $329 million and a tax provision of $390 million for 2023 and 2022, respectively.

The change in tax provision in 2023 compared to 2022 was primarily driven by lower pre-tax income in 2023, benefits from EV credits generated in 2023 and the release of valuation allowances in 2023 primarily related to the characterization of the loss on the restructuring of European operations.

CONSOLIDATED RESULTS OF OPERATIONS - HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had $704 million of income and $627 million of expense from the change in fair value of Public Warrants that was incremental to Hertz for the years ended December 31, 2022 and 2021, respectively.

Hertz Global also had $164 million of reorganization items, net for the year ended December 31, 2021 that was incremental to the amounts shown for Hertz, which represents certain effects from the implementation of the Plan of Reorganization.

Hertz Global had $2 million of interest expense, net, during 2020 that was incremental to the amounts shown for Hertz.

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 statements of operations, but this amount is eliminated in consolidation for purposes of Hertz Global.

In 2020, Hertz Global had $1 million of income tax benefit that was incremental to the amounts shown for Hertz due primarily to the $133 million master loan write-off included in Hertz's consolidated statements of operations.

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

As of December 31, 2022, our Americas RAC operations had a total of approximately 5,500 company-operated and franchisee locations, comprised of 1,900 airport and 3,600 off airport locations.

Hertz Global had income of $163 million and $704 million from the change in fair value of Public Warrants that was incremental to Hertz for the years ended December 31, 2023 and 2022, respectively.

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

As of December 31, 2023, our Americas RAC operations had a total of approximately 5,200 company-operated and franchisee locations, comprised of 1,900 airport and 3,300 off airport locations.

Results of operations and our discussion and analysis for our Americas RAC segment were as follows:

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Total revenues $ 7,722 $ 7,280 $ 6,215 6% 17%

Depreciation of revenue earning vehicles and lease charges, net $ 553 $ 343 $ 1,352 61 (75)

Depreciation of revenue earning vehicles and lease charges, net $ 1,775 $ 553 $ 343 NM 61

Direct vehicle and operating expenses $ 4,582 $ 4,080 $ 3,302 12 24

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Vehicle interest expense

$ 140 $ 213 $ 329 (34) (35)

Reorganization items, net $ — $ 80 $ 8 (100) NM

Adjusted EBITDA

$ 456 $ 140 $ 213 NM (34)

Reorganization items, net $ — $ — $ 80 — (100)

Adjusted EBITDA

$ 585 $ 2,292 $ 2,173 (74) 5

Transaction Days (in thousands) (b)

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81 % 79 % 79 %

Total RPD (in whole dollars) (d)

Total RPD (in dollars) (d)

$ 61.65 $ 65.03 $ 61.99 (5) 5

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Depreciation Per Unit Per Month (in whole dollars) (f)

$ 112 $ 81 $ 258 39 (69)

$ 332 $ 112 $ 81 NM 39

Percentage of program vehicles as of period end

1 % 1 % 0.4 %

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

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

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

Total revenues for Americas RAC increased $1.1 billion in 2022 compared to 2021 due primarily to higher volume and pricing.

The increase in Transaction Days was driven primarily by volume increases in most leisure and business categories as travel demand increased.

Volume increased in our airport locations by 16% compared to 2021.

The increase in Total RPD was driven primarily by higher pricing across the industry due to growth in travel demand and industry-wide supply chain constraints on vehicles.

Total revenues for Americas RAC increased $443 million in 2023 compared to 2022 due primarily to higher volume, with an increase in Transaction Days, partially offset by lower pricing.

The increase in Transaction Days was driven primarily by volume increases in most leisure categories, in light of sustained travel demand, along with volume increases among our ride share customers.

Volume at our airport locations increased 12% compared to 2022.

Airport revenues comprised 68% of total revenues for the segment in 2023 consistent with 2022.

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $210 million in 2022 compared to 2021.

Depreciation Per Unit Per Month increased to $112 compared to $81 in 2021 due primarily to higher vehicle acquisition costs, partially offset by gains recognized on increased vehicle dispositions.

Average Vehicles increased due primarily to travel demand.

DOE for Americas RAC increased $777 million in 2022 compared to 2021.

Excluding an unfavorable $6 million fx impact, DOE increased $783 million due primarily to higher fleet-related costs driven by increased volume discussed above and fleet age, higher personnel costs and litigation settlements in the fourth quarter of 2022.

Non-vehicle depreciation and amortization for Americas RAC decreased $52 million in 2022 compared to 2021 resulting primarily from fully depreciated intangible assets related to concession rights.

Total RPD declined from previously elevated post-COVID levels.

Revenues in Americas RAC were also impacted by an unfavorable $11 million fx impact in 2023.

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $1.2 billion in 2023 compared to 2022 due primarily to (i) reduced per unit gains on vehicle dispositions, (ii) an increase in Average

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

SG&A for Americas RAC increased $69 million in 2022 compared to 2021 due primarily to increased advertising spend and personnel costs.

Vehicle interest expense for Americas RAC decreased $73 million in 2022 compared to 2021 due primarily to $97 million of unrealized gains on interest rate caps, partially offset by higher debt levels due to the issuance of the HVF III 2022 Series Notes.

Year Ended December 31, 2021 Compared with Year Ended December 31, 2020

Total revenues for Americas RAC increased $2.5 billion in 2021 compared to 2020 due primarily to higher pricing and volume.

The 40% increase in Total RPD was driven primarily by higher pricing across the industry due to growth in travel demand and industry-wide supply chain constraints on vehicles.

The 18% increase in Transaction Days was driven primarily by volume increases in leisure and most business categories as government-imposed travel restrictions began to lift in 2021 due to increased access to COVID-19 vaccines.

Volume increased in our airport locations by 44%.

Airport revenues comprised 70% of total revenues for the segment in 2021 compared to 56% in 2020.

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC decreased $1.0 billion in 2021 compared to 2020.

Average Vehicles decreased 19% and Depreciation Per Unit Per Month decreased to $80 compared to $258 in 2020, due primarily to increasing residual values and longer vehicle holding periods resulting in an increase in vehicles that were fully depreciated and an increase in gains recognized on the disposition of vehicles.

DOE for Americas RAC increased $540 million in 2021 compared to 2020.

Excluding a $5 million fx impact, DOE increased $534 million due primarily to higher volume driven by the increased travel demand discussed above and increased vehicle maintenance costs due primarily to longer vehicle holding periods resulting from industry-wide supply chain constraints on vehicles, partially offset by lower fleet-related costs due to a reduced fleet size and lower facility costs resulting from cost-reduction initiatives.

Non-vehicle depreciation and amortization for Americas RAC decreased $16 million in 2021 compared to 2020 resulting in part from the Lease Rejection Orders in 2020 and fully depreciated intangible assets related to concession rights.

Vehicle interest expense for Americas RAC decreased $116 million in 2021 compared to 2020 due primarily to lower average balances and lower average rates resulting from the issuance of the HVF III ABS Notes and the full repayment and termination of the HVF II ABS Notes in accordance with the Plan of Reorganization.

Reorganization items, net for Americas RAC increased $73 million in 2021 compared to 2020 due primarily to the loss on extinguishment of certain vehicle debt resulting from the implementation of the Plan of Reorganization and certain contract-related charges in the first half of 2021.

Vehicles and (iii) a lower volume of vehicle dispositions, partially offset by longer vehicle holding periods.

Additionally, depreciation of revenue earning vehicles and lease charges, net increased due to the $245 million write-down of the carrying value of EV Disposal Group resulting from its classification as held for sale in December 2023.

The increase in Average Vehicles was driven in part by decisions, primarily during the fourth quarter of 2023, to delay planned fleet sales in light of an unfavorable used vehicle market.

We expect depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment to be impacted in 2024 by several factors:

DOE for Americas RAC increased $502 million in 2023 compared to 2022 due primarily to higher volume-related costs and higher collision and damage costs, particularly for the EV fleet, partially offset by cost saving initiatives in 2023.

Americas RAC DOE was also impacted by an unfavorable $7 million fx impact in 2023.

We expect the completion of the sale of the EV Disposal Group to have a positive impact on DOE in our Americas RAC segment in 2024, particularly later in the year as sales are completed.

Non-vehicle depreciation and amortization for Americas RAC increased $11 million in 2023 compared to 2022 resulting primarily from incremental depreciation on completed location refurbishment projects and accelerated amortization on certain software assets.

SG&A for Americas RAC increased $150 million in 2023 compared to 2022 due primarily to increased IT and personnel costs and higher advertising spend.

Vehicle interest expense for Americas RAC increased $316 million in 2023 compared to 2022 due primarily to higher average interest rates, which in part reflects reduced unrealized gains on interest caps in 2023, and higher debt levels resulting primarily by increased fleet levels.

The impact of higher interest rates and higher debt levels were a result of higher benchmark rates on the HVF III 2021-A Notes and higher average interest rates and higher debt levels from the issuance of the HVF III Series 2023 Notes.

Vehicle interest expense, net in our Americas RAC segment was also impacted by the unwind of certain of its interest rate caps in the first quarter of 2023 resulting in the realization of $88 million of previously unrealized gains, partially offset by a $98 million realized gain.

International RAC

As of December 31, 2022, our International RAC operations had approximately 6,100 company-operated and franchisee locations, comprised of 1,400 airport and 4,700 off airport locations in approximately 110 countries and regions including the countries of Australia, New Zealand, and in the regions of Africa, Asia, Europe and the Middle East.

As of December 31, 2023, our International RAC operations had approximately 6,200 company-operated and franchisee locations, comprised of 1,500 airport and 4,700 off airport locations in approximately 110 countries and jurisdictions, including Africa, Asia, Australia, Europe, the Middle East and New Zealand.

HERTZ GLOBAL HOLDINGS, INC.

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Vehicle interest expense

$ 19 $ 59 $ 80 (69) (26)

Reorganization items, net $ — $ 12 $ — (100) NM

$ 99 $ 19 $ 59 NM (69)

Reorganization items, net $ — $ — $ 12 — (100)

Adjusted EBITDA

$ 350 $ 90 $ (229) NM NM

$ 302 $ 350 $ 90 (14) NM

Transaction Days (in thousands) (b)

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76 % 73 % 74 %

Total RPD (in whole dollars) (d)

Total RPD (in dollars) (d)

$ 56.19 $ 56.14 $ 43.24 — 30

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18 % 29 % 32 %

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

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

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

Total revenues for International RAC increased $420 million in 2022 compared to 2021 due to higher pricing and volume.

Total RPD increased 30% driven primarily by higher pricing in most leisure categories and across the industry due to industry-wide constraints on vehicle supply.

Transaction Days increased 23% driven primarily by higher volume in most leisure categories due to easing of government-imposed travel restrictions.

Excluding an unfavorable $162 million fx impact, revenues increased $582 million.

Depreciation of revenue earning vehicles and lease charges, net for International RAC decreased $7 million in 2022 compared to 2021.

Excluding an unfavorable $18 million fx impact, depreciation increased $11 million.

Average Vehicles for International RAC increased 22% in 2022 due primarily to increased travel demand.

Depreciation Per Unit Per Month for International RAC decreased to $139 from $160 for 2022 versus 2021 due primarily to strength in residual values resulting in higher vehicle sales gains.

DOE for International RAC increased $123 million in 2022 compared to 2021.

Excluding an unfavorable $86 million fx impact, DOE increased $209 million due primarily to higher volume driven by increased travel demand.

SG&A for International RAC increased $45 million in 2022 compared to 2021.

Excluding an unfavorable $20 million fx impact, SG&A increased $65 million due primarily to increased advertising spend and facility costs.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Vehicle interest expense for International RAC decreased $41 million in 2022 compared to 2021 due primarily to $14 million of unrealized gains on interest rate caps and lower average rates in 2022 and the write-off in 2021 of capitalized fees with no comparable write-off in 2022.

Year Ended December 31, 2021 Compared with Year Ended December 31, 2020

Total revenues for International RAC increased $113 million in 2021 compared to 2020 due to higher pricing, partially offset by lower volume.

Excluding a $42 million fx impact, revenues increased $71 million due to higher pricing and higher leisure mix in Europe.

Total RPD increased 17% driven primarily by higher pricing across the industry due to industry-wide supply chain constraints on vehicles and higher leisure mix in Europe beginning in the second half of 2021.

Transaction Days decreased 8% driven primarily by lower volume in most leisure and business categories due to continued government-imposed travel restrictions.

Depreciation of revenue earning vehicles and lease charges, net for International RAC decreased $89 million in 2021 compared to 2020.

Excluding a $6 million fx impact, depreciation decreased $95 million.

Average Vehicles for International RAC decreased 24% due to fleet reductions in 2020 in response to lower demand during the pandemic and vehicle supply shortages limiting fleet expansion as demand began to return in 2021.

Depreciation Per Unit Per Month for International RAC decreased to $171 from $214 for 2021 versus 2020 due to strength in residual values resulting in lower gross depreciation, offset by higher vehicle sales gains.

DOE for International RAC decreased $42 million in 2021 compared to 2020.

Excluding a $30 million fx impact, DOE decreased $72 million due primarily to lower volume driven by the impact of travel restrictions resulting from COVID-19 and lower facility costs resulting from cost-reduction initiatives, partially offset by increases related to restructuring initiatives.

Non-vehicle depreciation and amortization for International RAC decreased $3 million in 2021 compared to 2020 due primarily to in-service placement of internally developed software assets.

SG&A for International RAC decreased $28 million in 2021 compared to 2020.

Excluding a $6 million fx impact, SG&A decreased $34 million due primarily to lower professional fees resulting from debt restructuring initiatives during 2020 and lower personnel costs, partially offset by higher marketing spend.

Vehicle interest expense for International RAC decreased $21 million in 2021 compared to 2020 due primarily to lower debt levels, partially offset by higher average rates.

Reorganization items, net for International RAC increased $12 million in 2021 compared to 2020 due primarily 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 during the first half of 2021.

Total revenues for International RAC increased $244 million in 2023 compared to 2022 due to higher volume.

Transaction Days increased 15% driven primarily by higher volume in most leisure and business categories due to increased travel demand.

Total RPD in 2023 was consistent with 2022.

International RAC revenues were also impacted by a favorable $22 million fx impact in 2023.

Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $116 million in 2023 compared to 2022 due primarily to higher vehicle acquisition costs, an increase in Average Vehicles and reduced per unit gains on vehicle dispositions, partially offset by a higher volume of vehicle dispositions in 2023.

Depreciation of revenue earning vehicles and lease charges, net was also impacted by a favorable $10 million fx impact in 2023.

Average Vehicles for International RAC increased in 2023 due in part to increased travel demand.

DOE for International RAC increased $152 million in 2023 compared to 2022 due primarily to higher volume, partially offset by a favorable $11 million fx impact in 2023.

SG&A for International RAC increased $47 million in 2023 compared to 2022 due primarily to increased intercompany royalty assessment fees paid to our corporate operations, partially offset by decreased incentive compensation and a reduction in litigation reserves.

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Vehicle interest expense for International RAC increased $81 million in 2023 compared to 2022 due primarily to higher interest rates and higher debt levels.

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

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restructuring and restructuring related charges;

reorganization items, net;

pre-reorganization items and non-debtor financing charges;

gain from the sale of a business, unrealized (gains) losses from financial instruments, and certain other miscellaneous items.

unrealized (gains) losses from financial instruments;

gain on sale of non-vehicle capital assets;

change in fair value of Public Warrants 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.

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Restructuring and restructuring related charges (3)

Intangible and other asset impairment (4)

Write-off of intercompany loan (5)

Reorganization items, net (4)

3 unchanged sentences

117 (111) (4)

Gain on sale of non-vehicle capital assets (8)

Litigation settlements (9)

9 unchanged sentences

Restructuring and restructuring related charges (3)

Intangible and other asset impairment (4)

Reorganization items, net (4)

3 unchanged sentences

117 (111) (4)

Gain on sale of non-vehicle capital assets (8)

Litigation settlements (9)

Change in fair value of Public Warrants (11)

(163) (704) 627

Other items (10)

Adjusted Corporate EBITDA $ 561 $ 2,305 $ 2,130

(1) In 2021, includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement recorded in the second quarter.

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

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

(1) In 2021, includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement recorded in the second quarter.

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

(3) Represents charges incurred under restructuring actions as defined in U.S.

GAAP, excluding impairments and asset write-downs.

See Note 10, "Restructuring," in Part II, Item 8 of this 2022 Annual Report for further information.

Also included restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(4) Represents the impairment of technology-related intangible assets and capitalized cloud computing cost.

In 2020, also represented impairment of other assets and the Hertz tradename.

See Note 5, "Goodwill and Intangible Assets, Net," in Part II, Item 8 of this 2022 Annual Report.

(5) Represented the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 16 , " Related Party Transactions ," in Part II, Item 8 of this 2022 Annual Report.

Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(4) Represents charges associated with the filing of and the emergence from the Chapter 11 Cases, as described in Note 19, "Reorganization Items, Net," in Part II, Item 8 of this 2023 Annual Report.

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See Note 11, "Financial Instruments," in Part II, Item 8 of this 2023 Annual Report.

(8) Represents the gain on sale of certain non-vehicle capital assets sold in March 2023.

See Note 3, "Divestitures," in Part II, Item 8 of this 2023 Annual Report.

(9) Represents payments made for the settlement of certain claims related to alleged false arrests.

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(10) Represents miscellaneous items.

For 2023, primarily includes certain IT-related costs, charges for certain storm-related vehicle damages and certain professional fees and charges related to the settlement of bankruptcy claims, partially offset by a loss recovery settlement.

For 2022, primarily includes certain bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims and certain non-cash stock-based compensation charges.

For 2021, primarily 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 $17 million for certain professional fees, $14 million of charges related to the settlement of bankruptcy claims, charges for a multiemployer pension plan withdrawal liability and letter of credit fees.

For 2020, primarily includes $16 million associated with the Donlen Sale, partially offset by charges of $18 million for losses associated with certain vehicle damages which were recorded in the second quarter, costs associated with our information technology and finance transformation programs, partially offset by a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.

(11) Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants, as disclosed in Note 12, "Fair Value Measurements," in Part II, Item 8 of this 2023 Annual Report.

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Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.

(c) Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels and determined using a simple average of such vehicles at the beginning and end of a given period.

Effective in the first quarter of 2022, as discussed above, we revised our calculation of Vehicle Utilization to use Average Rentable Vehicles in the denominator.

Accordingly, prior periods have been restated to conform with the revised definition.

Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days.

The calculation of Vehicle Utilization is shown below:

Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period.

Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels and is determined using a simple average of such vehicles at the beginning and end of a given peri od.

Americas RAC International RAC

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(e) Total RPU Per Month is calculated as Total Revenues - adjusted for foreign currency divided by the Average Rentable Vehicles in each period and then divided by the number of months in the period reported.

As discussed above, effective in the first quarter of 2022, we revised our calculation of Total RPU to use Average Rentable Vehicles as the denominator.

Accordingly, prior periods have been restated to conform with the revised definition.

The calculation of Total RPU Per Month is shown below:

Americas RAC International RAC

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LIQUIDITY AND CAPITAL RESOURCES

and international operations are funded by cash provided by operating activities and by extensive financing arrangements maintained by us in the U.S.

and international operations are funded by cash provided by operating activities and by extensive financing arrangements in the U.S.

and internationally.

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As of December 31, 2023, $328 million of cash and cash equivalents and $129 million of restricted cash and cash equivalents were held by our subsidiaries outside of the U.S.

We do not assert permanent reinvestment with respect to our non-U.S.

earnings, and if not in the form of loan repayments or subject to favorable tax treaties, repatriation of some of these funds under current regulatory and tax law for use in domestic operations could expose us to additional cash taxes.

We continue to assert non-permanent reinvestment of foreign earnings that give rise to excess cash, provided such cash can be remitted in a tax efficient manner.

We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, including disposal of the EV Disposal Group, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations for the next twelve months and for the foreseeable future thereafter.

Cash Flows - Hertz

As of December 31, 2022 and 2021, Hertz had cash and cash equivalents of $943 million and $2.3 billion, respectively, and restricted cash and cash equivalents of $475 million and $393 million, respectively.

As of December 31, 2023 and 2022, Hertz had cash and cash equivalents of $764 million and $943 million, respectively, and restricted cash and cash equivalents of $442 million and $475 million, respectively.

The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for the periods shown:

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Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

In 2022, cash flows from operating activities increased by $732 million year over year due primarily to the $518 million change in net income, as adjusted for non-cash and non-operating items, and the associated decrease of $214 million in working capital requirements.

Cash flows from working capital accounts increased due primarily to cash paid for reorganization items in 2021 and the payment of claims in the second half of 2021 that had been previously deferred and subject to compromise while in Chapter 11.

In 2023, cash flows from operating activities decreased by $67 million year over year due primarily to a $169 million change in working capital accounts, partially offset by a $102 million change in net income, as adjusted for non-cash and non-operating items.

Cash flows from working capital accounts decreased due primarily to a reduction in accrued liabilities due in part to incentive payments in 2023, the payment of bankruptcy claims in 2022 and a reduction in customer loyalty program accruals resulting in part from a change in program terms during 2023.

Additionally, cash flows from working capital accounts decreased due to lower value added tax payables arising from intercompany fleet transfers in 2022.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles.

During 2022, there was a $689 million increase in cash used in investing activities compared to 2021 due primarily to a $3.4 billion increase in purchased vehicles due to increasing travel demand, primarily in our Americas RAC segment, $871 million net proceeds received from the Donlen Sale in 2021 with no comparable amount in 2022, partially offset by $3.7 billion increase in disposal proceeds in 2022 due to gains recognized on increased vehicle dispositions.

Net financing cash inflows were $488 million in 2022 compared to $2.9 billion in 2021.

The $2.4 billion decrease in cash inflows was due to $5.6 billion of net proceeds received from the issuance of reorganized Hertz Global equity in 2021 with no comparable in 2022, partially offset by net proceeds of $3 billion primarily related to the issuance of vehicle debt in 2022.

During 2023, there was a $209 million decrease in cash used in investing activities compared to 2022 driven by $162 million of net proceeds received in 2023 due to the sale of certain non-vehicle capital assets as disclosed in Note 3, "Divestitures," in Part II, Item 8 of this 2023 Annual Report.

Cash used in investing activities also decreased in 2023 due to an $82 million decrease in revenue earning vehicles expenditures, net, primarily associated with our Americas RAC segment, due in part from decreased vehicle acquisitions in 2023.

We expect that in 2024, cash

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Year ended December 31, 2021 compared with year ended December 31, 2020

In 2021, cash flows from operating activities increased by $850 million year over year due primarily to the $1.5 billion change in net income, as adjusted for non-cash and non-operating items, partially offset by the associated reduction of $607 million in working capital requirements.

Cash flows from working capital accounts decreased due primarily to $485 million cash paid for reorganization items in 2021 compared to $102 million paid in 2020, and the payment of claims in the second half of 2021 that had been previously deferred and subject to compromise while in Chapter 11.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles.

During 2021, there was an $8.1 billion decrease in the cash provided by investing activities compared to 2020 due primarily to a $7.3 billion decrease in disposal proceeds in 2021 where disposals in 2020 increased due to the Interim Lease Order and the impact of COVID-19 on travel demand and a $1.6 billion increase in purchased vehicles due to increasing travel demand, primarily in our Americas RAC segment.

The net decrease in cash provided was partially offset by $871 million net proceeds from the Donlen Sale.

Net financing cash inflows were $2.9 billion in 2021 compared to cash outflows of $5.4 billion in 2020.

In 2021, cash inflows of $5.6 billion were due to contributions from Hertz Holdings from net proceeds received from the issuance of reorganized Hertz Global equity which were partially offset by $2.5 billion of cash dividends paid to Hertz Global to fund share repurchases.

In 2020, cash outflows of $10.8 billion were due to the repayment of vehicle debt which were partially offset by reduced borrowings of $4.5 billion primarily resulting from the Chapter 11 Cases.

used in investing activities in our Americas RAC segment will increase compared to 2023 as we increase acquisitions of new vehicles and dispose of vehicles with lower expected residual values.

Net financing cash inflows were $1.3 billion in 2023 compared to $488 million in 2022.

The $828 million increase in cash inflows was due primarily to a $2.2 billion reduction in dividends paid by Hertz to Hertz Holdings due to reduced share repurchases in 2023, and an increase of $492 million in net proceeds from non-vehicle debt resulting primarily from the issuance of a new term loan in 2023.

The increase in net financing cash inflows in 2023 was partially offset by a decrease of $1.8 billion in net proceeds from vehicle debt as a result of less issuances in 2023 compared to 2022.

Cash Flows - Hertz Global

As of December 31, 2022 and 2021, Hertz Global had cash and cash equivalents of $943 million and $2.3 billion, respectively, and restricted cash and cash equivalents of $475 million and $393 million, respectively.

As of December 31, 2023 and 2022, Hertz Global had cash and cash equivalents of $764 million and $943 million, respectively, and restricted cash and cash equivalents of $442 million and $475 million, respectively.

The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for Hertz Global for the periods shown:

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Net change in cash and cash equivalents and restricted cash and cash equivalents $ (212) $ (1,233) $ 1,073 $ 1,021 $ (2,306)

Fluctuations in operating, investing and financing cash flows from period to period were due to the same factors as those disclosed for Hertz above, with the exception of any cash inflows or outflows related to proceeds or disbursements from the issuance or repurchase of stock as disclosed in Note 17, "Equity – Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report, the issuance or exercise of Public Warrants as disclosed in Note 19, "Public Warrants - Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report.

See Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global," and Note 17, "Public Warrants - Hertz Global," in Part II, Item 8 of this 2023 Annual Report.

Share Repurchase Programs for Common Stock

In November 2021, Hertz Global's Board of Directors approved a share repurchase program that authorizes the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock (the "2021 Share Repurchase Program").

Between the inception of the share repurchase program and December 31, 2021, a total of

In November 2021, Hertz Global's independent Audit Committee recommended, and its Board approved, the 2021 Share Repurchase Program, which was announced on November 29, 2021.

Under the completed 2021 Share Repurchase Program, a total of 97,783,047 shares of Hertz Global common stock were repurchased for an aggregate purchase price of $2.0 billion.

In June 2022, Hertz Global's independent Audit Committee recommended, and its Board approved, the 2022 Share Repurchase Program that authorized additional repurchases of up to an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock.

The 2022 Share Repurchase Program, announced on June 15, 2022, has no initial time limit, does not obligate Hertz Global to acquire any particular amount of common stock and can be discontinued at any time.

As of December 31, 2023, approximately $874 million remains available under the 2022 Share Repurchase Program.

Between inception and December 31, 2022, a total of 47,303,009 shares of Hertz Global's common stock were repurchased in open-market transactions under the 2022 Share Repurchase Program at an average share price of $17.64 for an aggregate purchase price of $835 million.

During the year ended December 31, 2023, a total of 19,381,160 shares of Hertz Global's common stock were repurchased in open-market transactions at an average

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

17,106,026 shares of Hertz Global's common stock were repurchased at an average share price of $23.83, resulting in an aggregate purchase price of $408 million.

During the second quarter of 2022, we completed the 2021 Share Repurchase Program by repurchasing 80,677,021 shares of Hertz Global's common stock during the first and second quarters of 2022 at an average share price of $19.74 for an aggregate purchase price of $1.6 billion.

Under the completed 2021 Share Repurchase Program, a total of 97,783,047 shares of Hertz Global common stock were repurchased for an aggregate purchase price of $2.0 billion.

Common shares repurchased are included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2022 and 2021 under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2022 Annual Report.

Any repurchases will be made at the discretion of management through a variety of methods, such as open-market transactions (including pre-set trading plans pursuant to Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

The share repurchase authorization has no initial time limit, does not obligate us to acquire any particular amount of common stock and can be discontinued at any time.

share price of $15.01 for an aggregate purchase price of $291 million.

Since inception of the 2022 Share Repurchase program a total of 66,684,169 shares of Hertz Global's common stock have been repurchased in open-market transactions at an average share price of $16.88 for an aggregate purchase price of $1.1 billion.

There were no share repurchases after December 31, 2023 through the date of the filing of this 2023 Annual Report.

Common shares repurchased are included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2023 and 2022 in Part II, Item 8 of this 2023 Annual Report.

Any future repurchases will be made at the discretion of management through a variety of methods, such as open-market transactions (including pre-set trading plans pursuant to Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

There can be no assurance as to the timing or number of shares of any repurchases.

Public Warrants

On the Effective Date, in accordance with the Plan of Reorganization, Hertz Global issued 89,049,029 Public Warrants.

Between the Effective Date and December 31, 2021, 6,040,280 Public Warrants were exercised, of which 428,102 were cashless exercises and 5,612,178 were exercised for $13.80 per share, resulting in cash proceeds to us of $77 million.

During the year ended December 31, 2022, 245,959 Public Warrants were exercised, of which 60,661 were cashless exercises and 185,298 were exercised for $13.80 per share.

During the years ended December 31, 2023 and 2022, 48,965 and 245,959 Public Warrants were exercised, of which 31,034 and 60,661 were cashless exercises and 17,931 and 185,298 were exercised for $13.80 per share, respectively.

As of December 31, 2023, a cumulative 6,335,204 Public Warrants have been exercised since their original issuance in June 2021.

The outstanding warrants are exercisable through June 30, 2051.

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Debt Financing

Refer to Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of December 31, 2022.

Cash paid for interest on non-vehicle debt during 2022 and 2021 was $168 million and $198 million, respectively.

The $30 million decrease in non-vehicle debt interest is primarily due to the payoff and termination of non-vehicle debt in accordance with the Plan of Reorganization in 2021.

Refer to Note 6, "Debt," in Part II, Item 8 of this 2023 Annual Report for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of December 31, 2023.

Cash paid for interest on vehicle debt during 2023 and 2022 was $469 million and $204 million, respectively.

The $53 million decrease in vehicle debt interest is primarily due to the payoff and termination of vehicle debt in accordance with the Plan of Reorganization in 2021, partially offset by new vehicle debt issued in 2022.

The $265 million increase in cash paid for vehicle debt interest is due primarily to higher interest rates and higher debt levels resulting primarily from the issuances of the HVF III Series 2023 Notes.

Cash paid for interest on non-vehicle debt during 2023 and 2022 was $252 million and $168 million, respectively.

The $84 million increase in non-vehicle debt interest is primarily due to higher interest rates and outstanding borrowings on the First Lien RCF during 2023.

A substantial portion of our liquidity requirements arise from servicing our indebtedness, funding our operations, including purchases of revenue earning vehicles, and funding non-vehicle capital expenditures.

We expect to maintain heightened levels of indebtedness into 2024 as we expect to dispose of more aged vehicles and purchase newer vehicles.

For a discussion of the risks associated with our high leverage, see Item 1A, "Risk Factors" in this 2023 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

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

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Corporate liquidity $ 2,030 $ 2,457

We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations contained in the subsequent table under the heading Contractual Obligations in this Item 7.

Non-vehicle Debt

Approximately $20 million of our outstanding non-vehicle debt is scheduled to mature during the twelve months following the issuance of this 2023 Annual Report.

We have reviewed our debt facilities for non-vehicle debt and determined that it is probable that we will be able, and have the intent, to refinance these facilities at such times as we determine appropriate prior to maturity.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Significant financing activities during the year ended December 31, 2023 for our non-vehicle debt were as follows:

During 2022, the aggregate committed amount under the First Lien RCF was increased from $1.3 billion to $1.9 billion and the sublimit for letters of credit was increased from $1.1 billion to $1.8 billion.

In March 2023, the aggregate committed amount under the First Lien RCF was increased from $1.9 billion to $2.0 billion.

In May 2023, the First Lien Credit Agreement was amended to change the benchmark interest rate on the Term Loans from the London Inter-Bank Benchmark Offered Rate ("USD LIBOR") to the term Secured Overnight Financing Rate ("SOFR") in connection with the cessation of USD LIBOR.

In November 2023, Hertz entered into an incremental term loan ("Incremental Term B Loan") in an aggregate principal amount of $500 million.

Letters of Credit

As of December 31, 2022, there were outstanding standby letters of credit totaling $691 million comprised primarily of $431 million were issued under the First Lien RCF and $245 million issued under the Term C Loan.

As of December 31, 2023, there were outstanding standby letters of credit totaling $995 million comprised primarily of $734 million issued under the First Lien RCF and $245 million issued under the Term C Loan.

As of December 31, 2023, there is no remaining capacity to issue letters of credit under the Term C Loan.

Such letters of credit have been issued primarily to support our insurance programs and to provide credit enhancement for our asset-backed securitization facilities, as well as to support our vehicle rental concessions and leaseholds.

Such letters of credit have been issued primarily to provide credit enhancement for our asset-backed securitization facilities and to support our insurance programs, as well as to support our vehicle rental concessions and leaseholds.

As of December 31, 2023, none of the issued letters of credit have been drawn upon.

Significant financing activities during the year ended December 31, 2023 for our vehicle debt were as follows:

We organize our discussion of significant vehicle debt financing facilities below by reportable segment.

In 2022, the following HVF III Series 2022 Fixed Rate Rental Car Asset Backed Notes (the "Series 2022 Notes") were issued as follows:

• HVF III Series 2022-1 Notes were issued in January 2022 in an aggregate principal amount of $750 million.

Hertz, an affiliate of HVF III, purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount eliminated in consolidation.

In July and August 2022, all of the Series 2022-1 Class D Notes were sold to third parties.

• HVF III Series 2022-2 Notes were issued in January 2022 in an aggregate principal amount of $750 million.

Hertz purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount is eliminated in consolidation.

• HVF III Series 2022-3 Notes were issued in March 2022 in an aggregate principal amount of $383 million.

Hertz purchased the Class D Notes, and as a result approximately $50 million of the aggregate principal amount eliminated in consolidation.

In July 2022, all of the Series 2022-3 Class D Notes were sold to third parties.

Approximately $2.3 billion of the outstanding vehicle debt in our Americas RAC segment is scheduled to mature during the twelve months following the issuance of this 2023 Annual Report.

We have reviewed our debt facilities and determined that it is probable that we will be able, and have the intent, to refinance these facilities at such times as we determine appropriate prior to maturity.

The following HVF III Series 2023 Fixed Rate Rental Car Asset Backed Notes (collectively, the "HVF III Series 2023 Notes") were issued during the year ended December 31, 2023:

• HVF III Series 2023-1 Notes, issued in March 2023, in an aggregate principal amount of $500 million in four classes (Class A, Class B, Class C and Class D).

At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $40 million, which were subsequently sold to third parties in September 2023 as discussed below.

• HVF III Series 2023-2 Notes, issued in March 2023, in an aggregate principal amount of $300 million.

• HVF III Series 2023-3 Notes and Series 2023-4 Notes, issued in August 2023, in aggregate principal amounts of $500 million, respectively.

There is subordination within each of the preceding series based on class.

At the time of each respective issuance, proceeds from the issuance of the HVF III Series 2023 Notes were used primarily to repay amounts outstanding on the Series 2021-A Notes, with any remaining funds used for the purchase or refinancing of certain eligible vehicles.

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

• HVF III Series 2022-4 Notes were issued in March 2022 in an aggregate principal amount of $667 million.

Hertz purchased the Class D Notes, and as a result $87 million of the aggregate principal amount eliminated in consolidation.

In August 2022, all of the Class D Notes were sold to a third party.

• HVF III Series 2022-5 Notes were issued in March 2022 in an aggregate principal amount of $364 million.

Hertz purchased the Class D Notes, and as a result approximately $47 million of the aggregate principal amount is eliminated in consolidation.

There is subordination within each of the Series 2022 Notes based on class.

Proceeds from the issuance of the Series 2022 Notes were used to repay amounts outstanding on the Series 2021-A Notes and for the purchase or refinancing of vehicles.

In June 2022, we entered into a repurchase agreement related to the outstanding HVF III Series 2022 Class D Notes (the "Repurchase Facility"), whereby Hertz may sell the HVF III Series 2022 Class D Notes to the Repurchase Facility counterparty and repurchase such notes from time to time.

Transactions occurring under the Repurchase Facility are based on mutually agreeable terms and prevailing rates.

As of December 31, 2022, transactions totaling $86 million were outstanding under the Repurchase Facility and such transactions bear interest at a rate of SOFR plus 150 basis points and have a 30-day tenor.

The Hertz Canadian Securitization was amended in June 2022 to extend the maturity of the aggregate maximum borrowings of CAD$350 million to June 2024.

In December 2022, the Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$390 million, for a temporary commitment period through April 2023.

Following the expiration of the temporary commitment period, aggregate maximum borrowings will revert to CAD$350 million.

Approximately $532 million of the outstanding vehicle debt in our Americas RAC segment is scheduled to mature during the twelve months following the issuance of this 2022 Annual Report.

During initial issuance of the HVF III Series 2022-2, Series 2022-5 and Series 2023-1 Class D Notes (the "Class D Notes"), Hertz, an affiliate of HVF III, purchased the Class D Notes.

In September 2023, Hertz sold the Class D Notes to third parties.

(In millions) Aggregate Principal Amount

HVF III Series 2022-2 Class D Notes $ 98

HVF III Series 2022-5 Class D Notes 47

HVF III Series 2023-1 Class D Notes 40

The HVF III Series 2021-A Notes were amended in June 2023 to increase the maximum principal amount that may be outstanding from $3.9 billion to $4.1 billion and to extend the maturity dates of the Series 2021-A Class A Notes and Class B Notes to June 2025 and August 2025, respectively.

Repurchase Facilities

As of December 31, 2023, there were no repurchase transactions outstanding under the Repurchase Facilities.

Hertz Canadian Securitization

The Hertz Canadian Securitization was amended in June 2023 to provide for aggregate maximum borrowings of CAD$475 million and to extend the maturity date to June 2025.

International RAC

In 2022, the following activities occurred to debt facilities within our International RAC segment:

• The Australian Securitization was amended in January 2022 to increase the aggregate maximum borrowings to AUD$250 million and to extend the maturity to April 2024.

Limited amended the U.K.

Financing Facility in April 2022 to extend the maturity of the aggregate maximum borrowings of £100 million to October 2023.

Limited amended the U.K.

Toyota Financing Facility in July 2022 to increase aggregate maximum borrowings to £42 million and extended the maturity to June 2023.

• Hertz New Zealand Holdings Limited amended its credit agreement in April 2022 to extend the maturity to June 2024.

In October 2022, the credit agreement was amended to provide for aggregate maximum borrowings up to NZD$85 million, for a seasonal commitment period through March 2023.

Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to NZD$60 million.

• The European ABS was amended in December 2022 to (i) increase the aggregate maximum borrowings to €1.1 billion, (ii) extend the maturity to November 2024, and (iii) incorporate the Italian fleet within the European ABS financing structure.

Approximately $90 million of the outstanding vehicle debt in our International RAC segment is scheduled to mature during the twelve months following the issuance of this 2023 Annual Report.

The European ABS was amended in September 2023 to (i) increase the aggregate maximum borrowings to €1.2 billion, (ii) extend the maturity date to March 2026 and (iii) amend certain other provisions to provide for further operating flexibility.

New Zealand RCF

The New Zealand RCF was amended in August 2023 to provide for aggregate maximum borrowings of NZD$120 million and to extend the maturity date to June 2025.

Australian Securitization

The Australian Securitization was amended in June 2023 to provide for aggregate maximum borrowings of AUD$340 million and to extend the maturity date to June 2025.

Financing Facility

Financing Facility was amended in June 2023 to provide for aggregate maximum borrowings of £135 million and to extend the maturity date to November 2024.

HERTZ GLOBAL HOLDINGS, INC.

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The First Lien Credit Agreement requires us to comply with the following financial covenant:

a First Lien Ratio of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year.

The financial covenant was effective beginning in the third quarter of 2021.

a ratio of First Lien debt to Consolidated EBITDA, as defined in our First Lien Credit Agreement which may be materially different than Adjusted Corporate EBITDA presented in this 2023 Annual Report, (the "First Lien Ratio") of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year.

As of December 31, 2023, we were in compliance with the First Lien Ratio.

In addition to the financial covenant, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries.

In addition to the financial covenant, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interests 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.

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In addition, the program vehicles manufactured by any such company would need to be removed from our financing facilities or re-designated as non-program vehicles, which would require us to furnish additional credit enhancement associated with these program vehicles.

Substantially all of our 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 asset-backed securities programs.

None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC and various international subsidiaries that facilitate our international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

We rely significantly on asset-backed and asset-based financing arrangements to purchase vehicles for our U.S.

and international vehicle rental fleets.

For further information concerning our asset-backed financing programs and our indebtedness, see Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." For a discussion of the risks associated with our reliance on asset-backed and asset-based financing and the significant amount of indebtedness, see Item 1A, "Risk Factors" in this 2022 Annual Report.

For further information concerning our asset-backed financing programs and our indebtedness, see Note 6, "Debt," in Part II, Item 8 of this 2023 Annual Report.

For a discussion of the risks associated with our reliance on asset-backed and asset-based financing and the significant amount of indebtedness, see Item 1A, "Risk Factors" in this 2023 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Capital Expenditures

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2021 (7,154) 2,818 (4,336)

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

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

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($ in millions) 2023 2022 2021 $ Change % Change $ Change % Change

Americas RAC $ (3,470) $ (3,763) $ 3,903 $ 293 (8) $ (7,666) NM

International RAC (628) (489) 929 (139) 28 (1,418) NM

Americas RAC $ (3,412) $ (3,470) $ (3,763) $ 58 (2) $ 293 (8)

International RAC (604) (628) (489) 24 (4) (139) 28

All other operations — — (84) — — 84 (100)

Total $ (4,098) $ (4,336) $ 4,556 $ 238 (5) $ (8,892) NM

Total $ (4,016) $ (4,098) $ (4,336) $ 82 (2) $ 238 (5)

NM - Not meaningful

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

In 2022, revenue earning vehicle expenditures increased approximately $3.4 billion, or 48%, compared to 2021, primarily in our Americas RAC segment, due primarily to increased vehicle acquisitions resulting from increased travel demand.

Revenue earning vehicle disposal proceeds increased approximately $3.7 billion in 2022 compared to 2021, primarily in our Americas RAC segment, resulting from increased vehicle dispositions.

Year ended December 31, 2021 compared with year ended December 31, 2020

In 2021, revenue earning vehicle cash flows decreased by $8.9 billion, primarily in our Americas RAC segment, as a result of reduced disposal proceeds in 2021 compared to increased disposals in 2020 resulting from the Interim Lease Order and the impact of COVID-19 on travel demand, partially offset by a slight increase in vehicle purchases due to increasing demand resulting from government-imposed travel restrictions that began to lift in 2021 due to increased access to COVID-19 vaccines.

In 2023, revenue earning vehicle expenditures decreased approximately $1.1 billion, or 10%, compared to 2022, primarily in our Americas RAC segment, resulting from decreased vehicle acquisitions in 2023 as we held vehicles longer.

Revenue earning vehicle disposal proceeds decreased approximately $1.0 billion, or 15%, in 2023 compared to 2022, primarily in our Americas RAC segment, driven by reduced per unit gains recognized on lower volume of vehicle dispositions.

In 2024, we expect revenue earning vehicles expenditures, net to increase as we increase acquisitions of new vehicles and dispose of vehicles with lower expected residual values.

Non-Vehicle Capital Asset Expenditures and Disposals

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2021 (71) 16 (55)

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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:

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All other operations — — (1) — — 1 (100)

Corporate (14) (11) (33) (3) 27 22 (67)

Corporate (40) (14) (11) (26) NM (3) 27

Total $ (7) $ (138) $ (55) $ 131 (95) $ (83) NM

NM - Not meaningful

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Year Ended December 31, 2023 Compared with Year Ended December 31, 2022

In 2022, net expenditures for non-vehicle capital assets increased by $83 million, driven primarily by our Americas RAC segment, resulting from the restart of location refurbishment projects put on hold during the Chapter 11 Cases and electric vehicle charging infrastructure spend in 2022.

Year ended December 31, 2021 compared with year ended December 31, 2020

In 2021, net expenditures for non-vehicle capital assets increased by $17 million, driven primarily by our Americas RAC segment, resulting from the restart of location refurbishment projects put on hold during the Chapter 11 Cases, partially offset by a reduction in information technology and finance transformation program costs in our corporate operations.

CONTRACTUAL OBLIGATIONS

The following table details our contractual cash obligations as of December 31, 2022:

In 2023, proceeds for non-vehicle capital assets increased by $169 million compared to 2022, driven by our Americas RAC segment, resulting primarily from the sale of certain non-vehicle capital assets as disclosed in Note 3, "Divestitures," in Part II, Item 8 of this 2023 Annual Report.

In 2023, expenditures for non-vehicle capital assets increased $38 million compared to 2022, primarily in our corporate operations, driven in part by IT-related and EV charging infrastructure expenses.

CONTRACTUAL AND OTHER OBLIGATIONS

The following table details our material cash requirements for our contractual and other obligations as of December 31, 2023:

Payments Due by Period

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(1) Amounts represent the estimated commitment fees and interest payments based on the principal amounts, minimum non-cancelable maturity dates and interest rates on the debt as of December 31, 2023.

See Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for further details.

See Note 6, "Debt," in Part II, Item 8 of this 2023 Annual Report for further details.

(2) Represents fleet purchases where contracts have been signed or are pending with committed orders under the terms of such agreements.

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Purchase obligations include $29 million representing our tax liability for uncertain tax positions and related net accrued interest and penalties.

The table excludes pension and other postretirement benefit obligations as disclosed in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

The table excludes pension and other postretirement benefit obligations as disclosed in Note 7, "Employee Retirement Benefits," in Part II, Item 8 of this 2023 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

Indemnification Obligations

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customer, supplier and other commercial contractual relationships and financial matters.

Performance under these indemnification obligations would

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

generally be triggered by a breach of terms of the contract or by a third-party claim.

Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim.

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.

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We sponsor defined benefit pension plans worldwide.

Pension obligations give rise to expenses that are dependent on assumptions discussed in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Previously we sponsored the Hertz Corporation Benefit Equalization Plan and the Hertz Corporation Supplemental Executive Retirement Plans which were rejected by the Bankruptcy Court and terminated in connection with the Plan of Reorganization.

Our 2022 worldwide net periodic pension expense included in the accompanying consolidated statement of operations for the year ended December 31, 2022 is $7 million, which was comparable to 2021.

The funded status (i.e., the dollar amount by which the projected benefit obligations exceeded the market value of pension plan assets) of the Hertz Retirement Plan, as defined in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data," decreased in December 31, 2022 compared with December 31, 2021 primarily due to decreased returns on plan assets.

Pension obligations give rise to expenses that are dependent on assumptions discussed in Note 7, "Employee Retirement Benefits," in Part II, Item 8 of this 2023 Annual Report.

Our 2023 worldwide net periodic pension expense included in the accompanying consolidated statement of operations for the year ended December 31, 2023 was $11 million compared to $7 million in 2022 resulting primarily from increased interest costs, partially offset by reduced settlements.

The funded status (i.e., the dollar amount by which the projected benefit obligations exceeded the market value of pension plan assets) of the Hertz Retirement Plan, as defined in Note 7, "Employee Retirement Benefits," in Part II, Item 8 of this 2023 Annual Report, increased in December 31, 2023 compared with December 31, 2022 due primarily to an increase in the value of plan assets.

We did not contribute to the Hertz Retirement Plan during 2023, and we do not anticipate contributing to the Hertz Retirement Plan during 2024.

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The level of 2024 and future contributions will vary and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations and the results of the final actuarial valuation.

We participate in several multiemployer pension plans.

We have accrued $20 million for benefit payments under our multiemployer pension plans which represents the net present value of projected liabilities as of December 31, 2022.

In the event that we withdraw from participation in one of these plans, then applicable law could require us to make an additional lump-sum contribution to the plan, payable in installments over a minimum of twenty years, which would be reflected as a liability on a discounted basis on our consolidated balance sheet.

Our withdrawal liability for any multiemployer plan would depend on the extent of the plan's funding of vested benefits.

Our multiemployer plans could have significant underfunded liabilities.

Such underfunding may increase in the event other employers become insolvent or withdraw from the applicable plan or upon the inability or failure of withdrawing employers to pay their withdrawal liability.

In addition, such underfunding may increase as a result of lower than

HERTZ GLOBAL HOLDINGS, INC.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

expected returns on pension fund assets or other funding deficiencies.

The occurrence of any of these events could have a material adverse effect on our consolidated financial position, results of operations or cash flows.

For a discussion of the risks associated with our pension plans, see Item 1A, "Risk Factors” in this 2022 Annual Report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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The preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts in our consolidated financial statements and accompanying notes.

The following accounting policies involve a higher degree of judgment and complexity in their application, and therefore, represent the critical accounting policies used in the preparation of our consolidated financial statements.

The following accounting policies involve a higher degree of judgment and complexity in their application, unless otherwise noted below, and therefore, represent the critical accounting policies used in the preparation of our consolidated financial statements.

If different assumptions or conditions were to prevail, the results could be materially different from our reported results.

For additional discussion of our critical accounting policies, as well as our significant accounting policies, see Note 2, "Significant Accounting Policies," to the Notes to our consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

For additional discussion of our critical accounting policies, as well as our significant accounting policies, see Note 2, "Significant Accounting Policies," in Part II, Item 8 of this 2023 Annual Report.

Revenue Earning Vehicles

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Vehicle repurchase programs guarantee on an aggregate basis the residual value of the program vehicle upon sale according to certain parameters which include the holding period, mileage and condition of the vehicles.

For all other vehicles, depreciation is recorded over the forecasted holding period based on estimated residual values at the time of disposal.

Since the contractual arrangement reduces or eliminates estimation uncertainty, we do not consider the depreciation of program vehicles to be part of our critical accounting policies or estimates.

For all other vehicles, depreciation is recorded over the estimated holding period based on projected residual values at the time of disposal.

Generally, when revenue earning vehicles are acquired outside of a vehicle repurchase program (i.e., non-program vehicles), we estimate the period that we will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage) and the targeted age of vehicles at the time of disposal.

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Market conditions for used vehicle sales can also be affected by external factors such as the economy, natural disasters, fuel prices, new and used vehicle supply levels, and incentives offered by manufacturers of new vehicles.

Upon disposal of revenue earning vehicles, any difference between the net proceeds received and the net book value results in a gain or loss and is recorded as an adjustment to depreciation of revenue earning vehicles and lease charges in the accompanying statements of operations.

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Self-insured Liabilities

Self-insured liabilities on our consolidated balance sheets include public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.

These represent an

Self-insured liabilities on our consolidated balance sheets primarily include public liability, property damage and liability insurance supplement.

These represent an estimate for both reported accident claims not yet paid, and claims incurred but not yet reported and are recorded on an undiscounted basis.

Reserve requirements are based

HERTZ GLOBAL HOLDINGS, INC.

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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 5. Market for Registrant’s Common Equity