21 unchanged sentences
Stock-Based Compensation
−Removed: Restructuring
Income Tax (Provision) Benefit
4 unchanged sentences
Related Party Transactions
−Removed: Equity – Hertz Global
−Removed: Earnings (Loss) Per Co mmon Share – Hertz Global
+Added: Equity and Earnings (Loss) Per Common Share – Hertz Global
Public Warrants - Hertz Global
31 unchanged sentences
Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment
−Removed: Description of the Matter For the year ended December 31, 2022, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $553 million, including gains and losses on disposals.
−Removed: As discussed in Note 2 to the consolidated financial statements, depreciation rates are reviewed on a quarterly basis based on management’s ongoing assessment of present and estimated future market conditions, the effect of these conditions on residual values at the expected time of disposal and the estimated holding period for the revenue earning vehicles.
−Removed: The Company’s fleet is comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).
−Removed: For program vehicles, the manufacturers guarantee a specified price or depreciation rate upon disposal, versus non-program vehicles where the Company estimates the residual value of the vehicle at the expected time of disposal.
+Added: Description of the Matter For the year ended December 31, 2023, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $1,775 million.
+Added: As discussed in Note 2 to the consolidated financial statements, depreciation rates are reviewed on a quarterly basis based on management’s ongoing assessment of present and estimated future market conditions, the effect of these conditions on residual values at the expected time of disposal and the estimated holding period for revenue earning vehicles.
+Added: The Company’s revenue earning vehicles are comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).
+Added: For program vehicles, the manufacturers guarantee the depreciation rate during established repurchase or auction periods, versus non-program vehicles where the Company estimates the period that the Company will hold the asset and the residual value of the vehicle at the expected time of disposal.
Auditing the Company’s calculation of depreciation for non-program vehicles related to the Americas RAC segment was complex due to the significant estimation uncertainty and management judgment to determine the estimated residual values at the expected time of disposal.
The significant estimation uncertainty was primarily due to management’s assumptions related to market conditions and their effect on estimated residual values.
−Removed: Additionally, auditing the calculation of depreciation was challenging due to the volume of data inputs utilized in management’s calculation, including historical sales data from multiple sources at varying levels of disaggregation along with additional data specific to the Company’s current fleet.
+Added: Additionally, auditing the calculation of depreciation was challenging due to the volume of data inputs utilized in management’s calculation and their assessment of significant assumptions, including historical sales data and estimated residual values from multiple sources, including third-party sources, at varying levels of disaggregation along with additional data specific to the Company’s current revenue earning vehicles.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s measurement of depreciation expense for non-program vehicles related to the Americas RAC segment.
For example, we tested controls over management’s quarterly review of the depreciation rates, which included their procedures to validate the completeness and accuracy of the data used in the calculation and their assessment of significant assumptions, specifically the estimated residual values of non-program vehicles related to the Americas RAC segment.
−Removed: To test the depreciation calculation for non-program vehicles, our audit procedures included, among others, testing the completeness and accuracy of the underlying data by comparing historical sales data and vehicle information used in the calculation (e.g., make, model, trim) to external sources and the Company’s records.
+Added: To test the depreciation calculation for non-program vehicles, our audit procedures included, among others, testing the completeness and accuracy of the underlying data by comparing historical sales data and vehicle information used in the calculation or in the assessment of significant assumptions (e.g., make, model, trim) to external sources and the Company’s records.
We evaluated the reasonableness of other significant assumptions, such as resale market conditions, to assess the reasonableness of the residual value estimates made by management.
−Removed: Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.
−Removed: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement
−Removed: Description of the Matter As disclosed in Notes 2 and 15 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
−Removed: The Company records liabilities for these matters based on actuarial analyses of historical claim activity and estimates of both reported accident claims not yet paid, and claims incurred but not yet reported.
−Removed: The estimated self-insured liabilities as of December 31, 2022 were $472 million.
−Removed: The actuarial analyses that determine the claims incurred but not yet reported portion of the liability balances considers a variety of factors, including the frequency and severity of losses, changes in claim reporting and resolution patterns, insurance industry practices, the regulatory environment and legal precedent.
−Removed: The adequacy of the liabilities is regularly monitored based on evolving accident claim history and insurance related state legislation changes.
+Added: We searched for contrary evidence associated with the significant assumptions and judgments made by management.
+Added: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement related to the Americas Rental Car (“RAC”) operations
+Added: Description of the Matter As disclosed in Notes 2 and 14 to the consolidated financial statements, the Company’s self-insured liabilities primarily include public liability, property damage, and liability insurance supplement.
+Added: The Company records liabilities for these matters based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses and administrative costs.
+Added: The liabilities include estimates for both reported accident claims not yet paid and claims incurred but not yet reported and are recorded on an undiscounted basis.
+Added: The estimated self-insured liabilities as of December 31, 2023 were $336 million related to the Americas RAC operations.
+Added: The adequacy of the liabilities is monitored quarterly based on evolving accident claim history and insurance related state legislation changes.
If the Company’s estimates change or if actual results differ from these assumptions, the amount of the recorded liabilities are adjusted to reflect these results.
1 unchanged sentence
AND SUBSIDIARIES
−Removed: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liability reserves is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the estimates, management’s application of complex judgments, and the use of actuarial methods.
−Removed: In addition, the public liability, property damage, and liability insurance supplement self-insured liability reserve estimates are sensitive to management’s assumptions related to rental volume, actuarial evaluations of historical claim experience and trends, and future projections of ultimate losses used in the computation of these self-insured liabilities.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liability estimation process.
−Removed: For example, we tested controls over management’s review of the assumptions outlined above that are used in these self-insured liability calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
−Removed: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liability reserves, we performed audit procedures that included involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
+Added: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liabilities reserves related to the Americas RAC operations is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the use of actuarial methods.
+Added: In addition, the public liability, property damage, and liability insurance supplement self-insured liabilities reserve estimates are sensitive to management’s assumptions related to actuarial evaluations of historical claim experience and trends and future projections of ultimate losses used in the computation of these self-insured liabilities.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liabilities estimation process related to the Americas RAC operations.
+Added: For example, we tested controls over management’s review of the methods, models, and the assumptions outlined above that are used in these self-insured liabilities calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
+Added: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liabilities reserves related to the Americas RAC operations, we performed audit procedures that included, among others, involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
We compared the Company's reserve to estimates of the liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.
57 unchanged sentences
Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment
−Removed: Description of the Matter For the year ended December 31, 2022, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $553 million, including gains and losses on disposals.
−Removed: As discussed in Note 2 to the consolidated financial statements, depreciation rates are reviewed on a quarterly basis based on management’s ongoing assessment of present and estimated future market conditions, the effect of these conditions on residual values at the expected time of disposal and the estimated holding period for the revenue earning vehicles.
−Removed: The Company’s fleet is comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).
−Removed: For program vehicles, the manufacturers guarantee a specified price or depreciation rate upon disposal, versus non-program vehicles where the Company estimates the residual value of the vehicle at the expected time of disposal.
+Added: Description of the Matter For the year ended December 31, 2023, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $1,775 million.
+Added: As discussed in Note 2 to the consolidated financial statements, depreciation rates are reviewed on a quarterly basis based on management’s ongoing assessment of present and estimated future market conditions, the effect of these conditions on residual values at the expected time of disposal and the estimated holding period for revenue earning vehicles.
+Added: The Company’s revenue earning vehicles are comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).
+Added: For program vehicles, the manufacturers guarantee the depreciation rate during established repurchase or auction periods, versus non-program vehicles where the Company estimates the period that the Company will hold the asset and the residual value of the vehicle at the expected time of disposal.
Auditing the Company’s calculation of depreciation for non-program vehicles related to the Americas RAC segment was complex due to the significant estimation uncertainty and management judgment to determine the estimated residual values at the expected time of disposal.
The significant estimation uncertainty was primarily due to management’s assumptions related to market conditions and their effect on estimated residual values.
−Removed: Additionally, auditing the calculation of depreciation was challenging due to the volume of data inputs utilized in management’s calculation, including historical sales data from multiple sources at varying levels of disaggregation along with additional data specific to the Company’s current fleet.
+Added: Additionally, auditing the calculation of depreciation was challenging due to the volume of data inputs utilized in management’s calculation and their assessment of significant assumptions, including historical sales data and estimated residual values from multiple sources, including third-party sources, at varying levels of disaggregation along with additional data specific to the Company’s current revenue earning vehicles.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s measurement of depreciation expense for non-program vehicles related to the Americas RAC segment.
For example, we tested controls over management’s quarterly review of the depreciation rates, which included their procedures to validate the completeness and accuracy of the data used in the calculation and their assessment of significant assumptions, specifically the estimated residual values of non-program vehicles related to the Americas RAC segment.
−Removed: To test the depreciation calculation for non-program vehicles, our audit procedures included, among others, testing the completeness and accuracy of the underlying data by comparing historical sales data and vehicle information used in the calculation (e.g., make, model, trim) to external sources and the Company’s records.
+Added: To test the depreciation calculation for non-program vehicles, our audit procedures included, among others, testing the completeness and accuracy of the underlying data by comparing historical sales data and vehicle information used in the calculation or in the assessment of significant assumptions (e.g., make, model, trim) to external sources and the Company’s records.
We evaluated the reasonableness of other significant assumptions, such as resale market conditions, to assess the reasonableness of the residual value estimates made by management.
−Removed: Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.
−Removed: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement
−Removed: Description of the Matter As disclosed in Notes 2 and 15 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
−Removed: The Company records liabilities for these matters based on actuarial analyses of historical claim activity and estimates of both reported accident claims not yet paid, and claims incurred but not yet reported.
−Removed: The estimated self-insured liabilities as of December 31, 2022 were $472 million.
−Removed: The actuarial analyses that determine the claims incurred but not yet reported portion of the liability balances considers a variety of factors, including the frequency and severity of losses, changes in claim reporting and resolution patterns, insurance industry practices, the regulatory environment and legal precedent.
−Removed: The adequacy of the liabilities is regularly monitored based on evolving accident claim history and insurance related state legislation changes.
+Added: We searched for contrary evidence associated with the significant assumptions and judgments made by management.
+Added: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement related to the Americas Rental Car (“RAC”) operations
+Added: Description of the Matter As disclosed in Notes 2 and 14 to the consolidated financial statements, the Company’s self-insured liabilities primarily include public liability, property damage, and liability insurance supplement.
+Added: The Company records liabilities for these matters based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses and administrative costs.
+Added: The liabilities include estimates for both reported accident claims not yet paid and claims incurred but not yet reported and are recorded on an undiscounted basis.
+Added: The estimated self-insured liabilities as of December 31, 2023 were $336 million related to the Americas RAC operations.
+Added: The adequacy of the liabilities is monitored quarterly based on evolving accident claim history and insurance related state legislation changes.
If the Company’s estimates change or if actual results differ from these assumptions, the amount of the recorded liabilities are adjusted to reflect these results.
THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liability reserves is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the estimates, management’s application of complex judgments, and the use of actuarial methods.
−Removed: In addition, the public liability, property damage, and liability insurance supplement self-insured liability reserve estimates are sensitive to management’s assumptions related to rental volume, actuarial evaluations of historical claim experience and trends, and future projections of ultimate losses used in the computation of these self-insured liabilities.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liability estimation process.
−Removed: For example, we tested controls over management’s review of the assumptions outlined above that are used in these self-insured liability calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
−Removed: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liability reserves, we performed audit procedures that included involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
+Added: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liabilities reserves related to the Americas RAC operations is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the use of actuarial methods.
+Added: In addition, the public liability, property damage, and liability insurance supplement self-insured liabilities reserve estimates are sensitive to management’s assumptions related to actuarial evaluations of historical claim experience and trends and future projections of ultimate losses used in the computation of these self-insured liabilities.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liabilities estimation process related to the Americas RAC operations.
+Added: For example, we tested controls over management’s review of the methods, models, and the assumptions outlined above that are used in these self-insured liabilities calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
+Added: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liabilities reserves related to the Americas RAC operations, we performed audit procedures that included, among others, involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
We compared the Company's reserve to estimates of the liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.
81 unchanged sentences
Total liabilities and stockholders' equity $ 24,605 $ 22,497
−Removed: (1) Hertz Global Holdings, Inc.'s consolidated total assets as of December 31, 2022 and December 31, 2021 include total assets of variable interest entities ("VIEs") of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
−Removed: Hertz Global Holdings, Inc.'s consolidated total liabilities as of December 31, 2022 and December 31, 2021 include total liabilities of VIEs of $ 1.3 billion and $ 733 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc.
−Removed: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.
+Added: (1) Hertz Global Holdings, Inc.'s consolidated total assets as of December 31, 2023 and December 31, 2022 include total assets of variable interest entities ("VIEs") of $ 1.7 billion and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.
+Added: Hertz Global Holdings, Inc.'s consolidated total liabilities as of December 31, 2023 and December 31, 2022 include total liabilities of VIEs of $ 1.7 billion and $ 1.3 billion, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc.
+Added: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," for further information.
The accompanying notes are an integral part of these financial statements.
12 unchanged sentences
Vehicle 555 159 284
−Removed: Non-vehicle (excludes contractual interest of $ 129 million for the year ended December 31, 2020)
+Added: Non-vehicle 238 169 185
Interest expense, net 793 328 469
−Removed: Technology-related intangible and other asset impairments — — 213
Other (income) expense, net 12 2 ( 21 )
1 unchanged sentence
(Gain) from the sale of a business — — ( 400 )
+Added: (Gain) on sale of non-vehicle capital assets ( 162 ) — —
Change in fair value of Public Warrants ( 163 ) ( 704 ) 627
52 unchanged sentences
Other comprehensive income (loss) — — — — — — ( 2 ) — — ( 2 ) — ( 2 )
−Removed: Net settlement on vesting of restricted stock — — — — ( 3 ) — — — — ( 3 ) — ( 3 )
Stock-based compensation charges — — — — 10 — — — — 10 — 10
−Removed: ATM Program, net — — 14 1 28 — — — — 29 — 29
−Removed: Distributions to noncontrolling interests, net — — — — — — — — — — ( 73 ) ( 73 )
−Removed: December 31, 2020 — — 156 2 3,047 ( 2,681 ) ( 212 ) 2 ( 100 ) 56 37 93
−Removed: Net income (loss) — — — — — 366 — — — 366 ( 1 ) 365
−Removed: Other comprehensive income (loss) — — — — — — ( 2 ) — — ( 2 ) — ( 2 )
−Removed: Stock-based compensation charges — — — — 10 — — — — 10 — 10
Cancellation of stock-based awards — — — — ( 10 ) — — — — ( 10 ) — ( 10 )
7 unchanged sentences
Public Warrant exercises — — 5 — 180 — — — — 180 — 180
−Removed: — — 5 — 180 — — — — 180 — 180
Nasdaq listing and share repurchases (1)
5 unchanged sentences
Other comprehensive income (loss) — — — — — — ( 80 ) — — ( 80 ) — ( 80 )
−Removed: Stock-based compensation charges, net of tax — — — — 131 — — — — 131 — 131
+Added: Stock-based compensation charges — — — — 131 — — — — 131 — 131
Net settlement on vesting of restricted stock — — — — ( 20 ) — — — — ( 20 ) — ( 20 )
1 unchanged sentence
Shares repurchases (3)
+Added: — — ( 127 ) — — — — 128 ( 2,428 ) ( 2,428 ) — ( 2,428 )
December 31, 2022 — — 323 5 6,326 ( 256 ) ( 294 ) 155 ( 3,136 ) 2,645 — 2,645
−Removed: The accompanying notes are an integral part of these financial statements.
−Removed: (1) The amounts presented herein may be rounded to agree to amounts in the audited consolidated balance sheet.
−Removed: Also see Note 19, "Public Warrants - Hertz Global."
−Removed: (2) See Nasdaq Listing and Share Repurchase Programs for Common Stock in Note 17, "Equity – Hertz Global."
+Added: Net income (loss) — — — — — 616 — — — 616 — 616
+Added: Other comprehensive income (loss) — — — — — — 46 — — 46 — 46
+Added: Stock-based compensation charges — — — — 87 — — — — 87 — 87
+Added: Net settlement on vesting of restricted stock — — 1 — ( 9 ) — — — — ( 9 ) — ( 9 )
+Added: Public Warrant exercises — — — — 1 — — — — 1 — 1
+Added: Shares repurchases (3)
+Added: — — ( 19 ) — — — — 20 ( 294 ) ( 294 ) — ( 294 )
+Added: December 31, 2023 — $ — 305 $ 5 $ 6,405 $ 360 $ ( 248 ) 175 $ ( 3,430 ) $ 3,092 — $ 3,092
+Added: (1) See also "Share Repurchase Programs for Common Stock" in Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global."
(2) Effective October 31, 2021, the 767 lease agreement was terminated.
See Note 3, "Divestitures."
+Added: (3) The amounts presented herein may be rounded to agree to amounts in the consolidated balance sheet.
+Added: Also see "Share Repurchase Programs for Common Stock" in Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global.
The accompanying notes are an integral part of these financial statements.
15 unchanged sentences
Deferred income taxes, net ( 380 ) 301 270
−Removed: Technology-related intangible and other asset impairments — — 213
Reorganization items, net — — 314
2 unchanged sentences
Change in fair value of Public Warrants ( 163 ) ( 704 ) 627
−Removed: (Gain) loss on financial instruments ( 111 ) ( 4 ) ( 3 )
+Added: Changes in financial instruments 117 ( 111 ) ( 4 )
Other 5 11 ( 1 )
14 unchanged sentences
Proceeds from disposal of non-vehicle capital assets 181 12 16
−Removed: Sales of marketable securities — — 74
Collateral payments — — ( 303 )
8 unchanged sentences
Proceeds from issuance of non-vehicle debt 2,490 — 4,644
+Added: Repayments of non-vehicle debt ( 2,018 ) ( 20 ) ( 6,352 )
+Added: Payment of financing costs ( 41 ) ( 48 ) ( 185 )
HERTZ GLOBAL HOLDINGS, INC.
4 unchanged sentences
2023 2022 2021
−Removed: Repayments of non-vehicle debt ( 20 ) ( 6,352 ) ( 855 )
−Removed: Payment of financing costs ( 48 ) ( 185 ) ( 75 )
Proceeds from Plan Sponsors — — 2,781
Early redemption premium payment — — ( 85 )
−Removed: Proceeds from issuance of common stock, net — — 28
Proceeds from exercises of Public Warrants — 3 77
12 unchanged sentences
Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 1,206 $ 1,418 $ 2,651
−Removed: $ 1,418 $ 2,651 $ 1,578
Supplemental disclosures of cash flow information:
10 unchanged sentences
Revenue earning vehicles and non-vehicle capital assets acquired through finance leases 69 15 79
−Removed: Purchases of non-vehicle capital assets included in liabilities subject to compromise — — 18
Operating lease right-of-use assets obtained in exchange for lease liabilities 721 614 177
52 unchanged sentences
Total liabilities and stockholder's equity $ 24,604 $ 22,496
−Removed: (1) The Hertz Corporation's consolidated total assets as of December 31, 2022 and December 31, 2021 include total assets of VIEs of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
−Removed: The Hertz Corporation's consolidated total liabilities as of December 31, 2022 and December 31, 2021 include total liabilities of VIEs of $ 1.3 billion and $ 733 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation.
−Removed: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.
+Added: (1) The Hertz Corporation's consolidated total assets as of December 31, 2023 and December 31, 2022 include total assets of VIEs of $ 1.7 billion and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.
+Added: The Hertz Corporation's consolidated total liabilities as of December 31, 2023 and December 31, 2022 include total liabilities of VIEs of $ 1.7 billion and $ 1.3 billion, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation.
+Added: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," for further information.
The accompanying notes are an integral part of these financial statements.
11 unchanged sentences
Vehicle 555 159 284
−Removed: Non-vehicle (excludes contractual interest of $ 129 million for the year ended December 31, 2020)
+Added: Non-vehicle 238 169 185
Interest expense, net 793 328 469
−Removed: Technology-related intangible and other asset impairments — — 213
−Removed: Write-off of intercompany loan — — 133
Other (income) expense, net 12 2 ( 21 )
1 unchanged sentence
(Gain) from the sale of a business — — ( 400 )
+Added: (Gain) on sale of non-vehicle capital assets ( 162 ) — —
Total expenses 9,248 6,940 5,862
31 unchanged sentences
Common Stock Shares Common Stock Amount Additional
−Removed: Paid-In Capital Due From Affiliate Accumulated
+Added: Paid-In Capital Accumulated
Deficit Accumulated
5 unchanged sentences
Other comprehensive income (loss) — — — — ( 2 ) ( 2 ) — ( 2 )
−Removed: Due from Hertz Holdings — — — ( 4 ) — — ( 4 ) — ( 4 )
−Removed: Liabilities subject to compromise (1)
−Removed: — — — ( 65 ) — — ( 65 ) — ( 65 )
−Removed: Write-off of intercompany loan (1)
−Removed: — — — 133 — — 133 — 133
−Removed: Stock-based compensation charges — — ( 2 ) — — — ( 2 ) — ( 2 )
−Removed: Distributions to noncontrolling interests, net — — — — — — — ( 73 ) ( 73 )
−Removed: December 31, 2020 100 — 3,953 — ( 3,783 ) ( 212 ) ( 42 ) 37 ( 5 )
−Removed: Net income (loss) — — — — 1,157 — 1,157 ( 1 ) 1,156
−Removed: Other comprehensive income (loss) — — — — — ( 2 ) ( 2 ) — ( 2 )
Non-cash distribution — — 65 — — 65 — 65
−Removed: — — 65 — — — 65 — 65
Stock-based compensation charges — — 10 — — 10 — 10
7 unchanged sentences
Other comprehensive income (loss) — — — — ( 80 ) ( 80 ) — ( 80 )
−Removed: Stock-based compensation charges, net of tax — — 131 — — — 131 — 131
−Removed: Dividends to Hertz Holdings (3)
+Added: Stock-based compensation charges — — 131 — — 131 — 131
+Added: Dividends paid to Hertz Holdings (2)
— — ( 2,477 ) — — ( 2,477 ) — ( 2,477 )
December 31, 2022 100 — 4,844 ( 1,271 ) ( 294 ) 3,279 — 3,279
−Removed: (1) See Note 16, "Related Party Transactions."
+Added: Net income (loss) — — — 452 — 452 — 452
+Added: Other comprehensive income (loss) — — — — 46 46 — 46
+Added: Stock-based compensation charges — — 87 — — 87 — 87
+Added: Dividends paid to Hertz Holdings (2)
+Added: — — ( 321 ) — — ( 321 ) — ( 321 )
+Added: December 31, 2023 100 $ — $ 4,610 $ ( 819 ) $ ( 248 ) $ 3,543 $ — $ 3,543
(1) Effective October 31, 2021, the 767 lease agreement was terminated.
See Note 3, "Divestitures."
−Removed: (3) See "Share Repurchase Programs for Common Stock" in Note 17, "Equity – Hertz Global," for additional information.
+Added: (2) See "Share Repurchase Programs for Common Stock" in Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global," for additional information.
The accompanying notes are an integral part of these financial statements.
14 unchanged sentences
Deferred income taxes, net ( 380 ) 301 270
−Removed: Technology-related intangible and other asset impairments — — 213
−Removed: Write-off of intercompany loan — — 133
Reorganization items, net — — 150
1 unchanged sentence
(Gain) loss on sale of non-vehicle capital assets ( 162 ) ( 5 ) ( 8 )
−Removed: (Gain) loss on financial instruments ( 111 ) ( 4 ) ( 3 )
+Added: Changes in financial instruments 117 ( 111 ) ( 4 )
Other 5 11 ( 1 )
14 unchanged sentences
Proceeds from disposal of non-vehicle capital assets 181 12 16
−Removed: Sales of marketable securities — — 74
Collateral payments — — ( 303 )
8 unchanged sentences
Proceeds from issuance of non-vehicle debt 2,490 — 4,644
+Added: Repayments of non-vehicle debt ( 2,018 ) ( 20 ) ( 6,352 )
+Added: Payment of financing costs ( 41 ) ( 48 ) ( 185 )
+Added: Early redemption premium payment — — ( 85 )
THE HERTZ CORPORATION AND SUBSIDIARIES
3 unchanged sentences
2023 2022 2021
−Removed: Repayments of non-vehicle debt ( 20 ) ( 6,352 ) ( 855 )
−Removed: Payment of financing costs ( 48 ) ( 185 ) ( 75 )
−Removed: Early redemption premium payment — ( 85 ) —
−Removed: Advances to Hertz Holdings — — ( 5 )
Contributions from (distributions to) noncontrolling interests — — ( 38 )
7 unchanged sentences
Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 1,206 $ 1,418 $ 2,650
−Removed: $ 1,418 $ 2,650 $ 1,550
Supplemental disclosures of cash flow information:
10 unchanged sentences
Revenue earning vehicles and non-vehicle capital assets acquired through finance leases 69 15 79
−Removed: Purchases of non-vehicle capital assets included in liabilities subject to compromise — — 18
Operating lease right-of-use assets obtained in exchange for lease liabilities 721 614 177
10 unchanged sentences
Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918.
−Removed: Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-operated, licensee and franchisee locations in the U.S., Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand.
−Removed: The Company also sells vehicles through Hertz Car Sales and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets.
−Removed: As disclosed in Note 3, "Divestitures," on March 30, 2021 the Company completed the Donlen Sale, a business which provided vehicle leasing and fleet management services.
−Removed: 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.
−Removed: Bankruptcy Code in the Bankruptcy Court.
−Removed: 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.
+Added: Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-operated and franchisee locations in the U.S., Europe, Africa, Asia, Australia, Canada, the Caribbean, Latin America, the Middle East and New Zealand.
+Added: The Company also sells vehicles through Hertz Car Sales.
Going Concern
3 unchanged sentences
The Company’s consolidated financial statements have been prepared in accordance with U.S.
−Removed: Reclassifications
−Removed: Certain prior period amounts have been reclassified to conform with current period presentation.
Principles of Consolidation
3 unchanged sentences
and international subsidiaries, and its VIEs, as applicable.
−Removed: The Company consolidates a VIE when it is deemed the primary beneficiary.
−Removed: The Company accounts for its investment in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary.
−Removed: All significant intercompany transactions are eliminated in consolidation.
+Added: The Company consolidates a VIE when it is deemed the primary beneficiary of the VIE.
+Added: All significant intercompany transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
−Removed: The preparation of financial statements in conformity with U.S.
−Removed: GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and footnotes.
−Removed: Actual results could differ materially from those estimates.
−Removed: Significant estimates inherent in the preparation of the consolidated financial statements include depreciation of revenue earning vehicles, reserves for litigation and other contingencies, accounting for income taxes and related uncertain tax positions, pension and postretirement benefit costs, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and indefinite-lived intangible assets including goodwill, valuation of stock-
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: based compensation, self-insured liabilities, allowance for doubtful accounts, the retail value of loyalty points, and fair value of financial instruments, among others.
+Added: The use of estimates and assumptions as determined by management is required in the preparation of the consolidated financial statements in conformity with U.S.
+Added: These estimates are based on management’s evaluation of historical trends and other information available when the consolidated financial statements are prepared and may affect the amounts reported and related footnote disclosures.
+Added: Actual results could differ from those estimates.
+Added: Significant estimates inherent in the preparation of the consolidated financial statements include depreciation of revenue earning vehicles, accounting for income taxes and related uncertain tax positions, self-insured liabilities and useful lives and impairment of long-lived tangible and indefinite-lived intangible assets including goodwill.
+Added: Other estimates inherent in the preparation of the consolidated financial statements include reserves for litigation and other contingencies, pension costs and the valuation of stock-based compensation, among others.
Revenue Earning Vehicles
Revenue earning vehicles are stated at cost, net of related discounts and incentives from manufacturers.
−Removed: Holding periods typically range from six to thirty-six months .
−Removed: Generally, when revenue earning vehicles are acquired outside of a vehicle repurchase program, the Company estimates the period that the Company will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).
+Added: Holding periods typically range from six to sixty-six months .
+Added: Generally, when revenue earning vehicles are acquired outside of a vehicle repurchase program (non-program), the Company estimates the period that the Company will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).
The Company also estimates the residual value of the applicable revenue earning vehicles at the expected time of disposal, taking into consideration factors such as make, model and options, age, physical condition, mileage, sale location, time of the year and market conditions.
Depreciation is recorded over the estimated holding period.
−Removed: 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 periods.
+Added: Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: estimated future market conditions, their effect on residual values at the expected time of disposal and the estimated holding periods.
Gains and losses on the sale of vehicles, including the costs associated with disposals, are included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.
1 unchanged sentence
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.
+Added: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
+Added: Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
+Added: The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
+Added: The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.
+Added: In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations.
+Added: The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
+Added: The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations.
+Added: Accrued interest and penalties are included in the related tax liability line in the accompany consolidated balance sheets.
+Added: The Company has elected to record tax on global intangible low-tax income (“GILTI”) on a current basis.
+Added: GILTI is a U.S.
+Added: tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold.
Self-insured Liabilities
−Removed: Self-insured liabilities in the accompanying consolidated balance sheets include public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
+Added: Self-insured liabilities in the accompanying 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.
4 unchanged sentences
The Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A goodwill impairment charge is calculated as the amount by which a reporting unit's carrying amount exceeds its fair value.
7 unchanged sentences
The Company’s discounted cash flow projections are based upon reasonable and appropriate assumptions about the underlying business activities of the Company’s reporting units.
−Removed: In the impairment analysis for an indefinite-lived intangible asset, the Company compares the carrying value of the asset to its estimated fair value and recognizes an impairment charge whenever the carrying amount of the asset
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: exceeds its estimated fair value.
+Added: In the impairment analysis for an indefinite-lived intangible asset, the Company compares the carrying value of the asset to its estimated fair value and recognizes an impairment charge whenever the carrying amount of the asset exceeds its estimated fair value.
The estimated fair value for a tradename utilizes a relief-from-royalty income approach, which includes the Company’s revenue projections for each asset, along with assumptions for royalty rates, tax rates and WACC.
−Removed: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
−Removed: Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
−Removed: The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
−Removed: The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.
−Removed: In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations.
−Removed: The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
−Removed: The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations.
−Removed: Accrued interest and penalties are included in the related tax liability line in the accompany consolidated balance sheets.
−Removed: The Company has elected to record tax on global intangible low-tax income (“GILTI”) on a current basis.
−Removed: "GILTI" is a U.S.
−Removed: tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold.
Revenue Recognition
7 unchanged sentences
Rental periods are short term in nature.
−Removed: Performance obligations associated with rental related activities, such as charges to the customer for the fueling of vehicles and value-added services such as loss damage waivers, insurance products, navigation units, supplemental equipment and other consumables, are also satisfied over the rental period.
+Added: Performance obligations associated with rental related activities, such as charges to the customer for the fueling and electric charging of vehicles and value-added services such as loss damage waivers, insurance products, navigation units, supplemental equipment and other consumables, are also satisfied over the rental period.
Revenue from charges that are charged to the customer, such as gasoline, vehicle licensing and airport concession fees, is recorded on a gross basis with a corresponding charge to direct vehicle and operating expense.
−Removed: Sales commissions paid to third parties are generally expensed when incurred due to the short-term nature of the related transaction on which the commission was earned and are recorded within selling, general and administrative expense.
+Added: The Company recognizes revenue related to collections from customers for vehicle damages.
+Added: Sales commissions paid to third parties are generally expensed when incurred due to the short-term nature of the related transaction on which the commission was earned and are recorded within DOE.
Payments are due from customers at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Loyalty Programs - The Company offers loyalty programs, primarily Hertz Gold Plus Rewards, wherein customers are eligible to earn loyalty points that are redeemable for free rental days or can be converted to loyalty points for redemption of products and services under loyalty programs of other companies.
3 unchanged sentences
Breakage is reviewed on a quarterly basis and includes significant assumptions such as historical breakage trends and internal Company forecasts.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Customer Rebates - The Company has business customers that rent vehicles based on terms that have been negotiated through contracts with their employers, or other entities with which they are associated (“commercial contracts”), which can differ substantially from the terms on which the Company rents vehicles to the general public.
8 unchanged sentences
These revenues are recorded at the point in time when the Company sells the product or provides the service to the customer.
−Removed: These revenues exclude the sale price of the vehicle which is a component of the gain or loss on the disposition and is included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.
+Added: These revenues exclude the sale price of the vehicle, which is a component of the gain or loss on the disposition and is included in depreciation of revenue earning vehicles and lease charges, net in the accompanying consolidated statements of operations.
Contract Balances
6 unchanged sentences
Restricted cash and cash equivalents include cash and cash equivalents that are not readily available for use in the Company's operating activities.
−Removed: Restricted cash and cash equivalents are primarily comprised of proceeds from the disposition of vehicles pledged under the terms of vehicle debt financing arrangements and are restricted for the purchase of revenue earning vehicles and other specified uses under the vehicle debt facilities, cash utilized as credit enhancement under those arrangements, proceeds from the Term Loan C which are utilized to collateralize letters of credit, and certain cash accounts supporting regulatory reserve requirements related to the Company's
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: self-insurance.
+Added: Restricted cash and cash equivalents are primarily comprised of proceeds from the disposition of vehicles pledged under the terms of vehicle debt financing arrangements and are restricted for the purchase of revenue earning vehicles and other specified uses under the vehicle debt facilities, cash utilized as credit enhancement under those arrangements, proceeds from the Term Loan C which are utilized to collateralize letters of credit, and certain cash accounts supporting regulatory reserve requirements related to the Company's self-insurance.
These funds are primarily held in demand deposit and money market accounts or in highly rated money market funds with investments primarily in government and corporate obligations.
3 unchanged sentences
Receivables, Net of Allowance
−Removed: Receivables are stated net of allowances and primarily represent credit extended to vehicle manufacturers, customers that satisfy defined credit criteria, and amounts due from customers resulting from damage to rental vehicles.
+Added: Receivables are stated net of allowances and primarily represent credit extended to vehicle manufacturers, customers that satisfy defined credit criteria, and amounts due from customers resulting from damage to rental
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The estimate of the allowance for doubtful accounts is based on the Company's future expected losses and its judgement as to the likelihood of ultimate payment.
Actual receivables are written-off against the allowance for doubtful accounts when the Company determines the balance will not be collected.
−Removed: Estimates for future credit memos are based on historical experience and are reflected as reductions to revenue, while bad debt expense is reflected as a component of direct vehicle and operating expense in the accompanying consolidated statements of operations.
+Added: Estimates for future credit memos are based on historical experience and are reflected as reductions to revenue in the accompanying consolidated statements of operations.
Property and Equipment, Net
5 unchanged sentences
Total property and equipment, net $ 671 $ 637
−Removed: Land is stated at cost and reviewed annually for impairment as further disclosed above in "Long-lived Assets, Including Finite-lived Intangible Assets."
+Added: Land is stated at cost and reviewed for impairment as further disclosed below in "Long-lived Assets, Including Finite-lived Intangible Assets."
Property and equipment are stated at cost and are depreciated utilizing the straight-line method over the estimated useful lives of the related assets.
9 unchanged sentences
Long-lived assets and intangible assets with finite lives, including technology-related intangibles, are amortized using the straight-line method over the estimated economic lives of the assets, which range from one to forty years and two to fifteen years , respectively.
−Removed: Long-lived assets and intangible assets with finite lives are
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
+Added: Long-lived assets and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
5 unchanged sentences
Forfeitures are accounted for when they occur.
−Removed: The Company has estimated the fair value of options issued at the date of grant using a Black-Scholes option-pricing model, which includes assumptions related to volatility, expected term, dividend yield and risk-free interest rate.
+Added: The Company has estimated the fair value of options issued at the date of grant using a Black-Scholes option-
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: pricing model, which includes assumptions related to volatility, expected term, dividend yield and risk-free interest rate.
The Company accounts for restricted stock unit ("RSU") and performance stock unit ("PSU") awards when granted as equity classified awards.
17 unchanged sentences
Financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes.
−Removed: In addition, financial instruments are entered into with a diversified group of major
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: financial institutions in order to manage the Company's exposure to counterparty nonperformance on such instruments.
+Added: In addition, financial instruments are entered into with a diversified group of major financial institutions in order to manage the Company's exposure to counterparty nonperformance on such instruments.
The Company measures all financial instruments at their fair value and does not offset the derivative assets and liabilities in its accompanying consolidated balance sheets.
4 unchanged sentences
The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.
−Removed: Foreign currency exchange rate gains and losses resulting from transactions are included in selling, general and administrative expense in the accompanying consolidated statements of operations.
+Added: Foreign currency exchange rate
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: gains and losses resulting from transactions are included in selling, general and administrative expense in the accompanying consolidated statements of operations.
Advertising production costs are deferred and expensed when the advertising first takes place.
5 unchanged sentences
Recently Issued Accounting Pronouncements
−Removed: Government Assistance
−Removed: In November 2021, the FASB issued guidance that increases the transparency of government assistance transactions.
−Removed: The guidance requires disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements.
−Removed: The guidance was effective for annual periods beginning after December 15, 2021.
−Removed: The Company adopted this guidance on January 1, 2022 on a prospective basis.
−Removed: As government assistance transactions were not material, the adoption of this guidance had no impact on the Company's financial position, results of operations or cash flows, and resulted in no associated disclosures.
−Removed: Note 3— Divestitures
−Removed: On March 30, 2021, the Company completed the sale of substantially all of the assets and certain liabilities of its Donlen subsidiary.
−Removed: For the year ended December 31, 2021, the Company recognized a pre-tax gain in its corporate operations of $ 400 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $ 891 million less $ 543 million net book value of assets sold plus a $ 53 million receivable in connection with the sale where cash proceeds were received in September 2021.
+Added: Not Yet Adopted as of December 31, 2023
+Added: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative
+Added: In October 2023, the FASB issued guidance that amends certain disclosure and presentation requirements related to the statement of cash flows, accounting changes and error corrections, earnings per share, interim reporting, commitments, debt, equity, derivatives, transfers and services and various industry specific guidance.
+Added: For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective.
+Added: However, if by June 30, 2027, the SEC has not removed the existing disclosure requirements, the amendments will not become effective.
+Added: Early adoption is not permitted.
+Added: The Company is in the process of assessing the overall impact of adopting this guidance on its disclosures.
+Added: Improvements to Reportable Segment Disclosures
+Added: In November 2023, the FASB issued guidance that modifies segment reporting disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: The guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024 using a retrospective transition method.
+Added: Early adoption is permitted.
+Added: The Company is in the process of determining the timing of the adoption and assessing the overall impact of adopting this guidance on its disclosures.
+Added: Improvements to Income Tax Disclosures
+Added: In December 2023, the FASB issued guidance to enhance income tax disclosures related to, among other items, rate reconciliation and income taxes paid.
+Added: The guidance is effective for annual periods beginning after December 15, 2024.
+Added: Early adoption is permitted.
+Added: The Company is in the process of determining the timing of the adoption and assessing the overall impact of adopting this guidance on its disclosures.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Note 3— Divestitures
+Added: Sales of Non-vehicle Capital Assets
+Added: In 2019, the Company substantially completed the sale of certain non-vehicle capital assets constituting real property, in an eminent domain proceeding, in its Americas RAC segment.
+Added: In 2023, the Company received additional cash from the sale upon final resolution of the eminent domain proceeding and recognized an additional $ 29 million pre-tax gain on the sale, which is included in (gain) on sale of non-vehicle capital assets in the accompanying consolidated statement of operations for the year ended December 31, 2023.
+Added: In 2023, the Company sold and leased back its Los Angeles, California airport location in its Americas RAC segment.
+Added: The transaction qualified for sale-leaseback accounting.
+Added: The Company recognized a pre-tax gain of $ 133 million based on the difference in the sale amount of $ 143 million less $ 9 million net book value of assets sold and $ 1 million in selling costs, which is included in (gain) on sale of non-vehicle capital assets in the accompanying consolidated statement of operations for the year ended December 31, 2023.
+Added: The leaseback is classified as an operating lease with a term of 36 months.
+Added: On March 30, 2021, the Company completed the sale of substantially all of the assets and certain liabilities of its Donlen subsidiary.
+Added: For the year ended December 31, 2021, the Company recognized a pre-tax gain in its corporate operations of $ 400 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $ 891 million less $ 543 million net book value of assets sold plus a $ 53 million receivable in connection with the sale where cash proceeds were received in September 2021.
Termination of 767 Auto Leasing Agreement
3 unchanged sentences
During the year ended December 31, 2021, 767 distributed $ 38 million to AEPC along with the return of certain vehicles, and there were no cash contributions from AEPC to 767.
−Removed: During the year ended December 31, 2020, 767 distributed $ 75 million to AEPC and there were no cash contributions from AEPC to 767, except for certain services.
−Removed: Sale of Marketable Securities
−Removed: In 2020, the Company sold marketable securities for $ 74 million and recognized an immaterial gain on the sale in its corporate operations, which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.
−Removed: Sale of Non-vehicle Capital Assets
−Removed: In 2019, the Company completed the sale of certain non-vehicle capital assets in its Americas RAC segment.
−Removed: In 2020, the Company received additional cash from the sale and recognized an additional $ 20 million pre-tax gain on the sale, which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 4— Revenue Earning Vehicles
3 unchanged sentences
Less accumulated depreciation ( 2,155 ) ( 1,649 )
+Added: 14,009 12,005
Revenue earning vehicles held for sale, net (1)
Revenue earning vehicles, net $ 14,651 $ 12,495
−Removed: (1) Represents the carrying amount of vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (1) Represents the carrying amount of vehicles classified as held for sale as of the respective balance sheet date, including the EV Disposal Group as disclosed below.
Depreciation of revenue earning vehicles and lease charges, net includes the following:
3 unchanged sentences
(Gain) loss on disposal of revenue earning vehicles (1)
+Added: 157 ( 1,125 ) ( 502 )
Rents paid for vehicles leased 29 20 36
Depreciation of revenue earning vehicles and lease charges, net $ 2,039 $ 701 $ 497
+Added: (1) Includes the write-down to fair value for vehicles classified as held for sale, including the EV Disposal Group as disclosed below, for the year ended December 31, 2023.
+Added: In December 2023, the Company identified the EV Disposal Group it desired to sell to in response to management's determination that the supply of EVs exceed customer demand, elevated EV damage and collision costs and a decline in EV residual values.
+Added: As a result, the EV Disposal Group, included in the Company's Americas RAC segment, has been classified as held for sale with an aggregate carrying value of $ 542 million and is included in revenue earning vehicles, net in the accompanying consolidated balance sheet as of December 31, 2023.
+Added: 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, which is included in depreciation of revenue earning vehicles and lease charges, net in the accompanying consolidated statement of operations for the year ended December 31, 2023.
+Added: The Company expects to complete the sale of the EV Disposal Group, primarily through its standard disposition channels, within the next 12 months.
Note 5— Goodwill and Intangible Assets, Net
1 unchanged sentence
On an annual basis as of October 1, and at interim periods when circumstances require as a result of a triggering event as defined by ASC 350 - Intangibles, Goodwill and Other ("Topic 350"), the Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis.
−Removed: An impairment is deemed to exist if the carrying value of goodwill or indefinite-lived intangible assets exceed their fair value as determined using level 3 inputs under the GAAP fair value hierarchy.
+Added: An impairment is deemed to exist if the carrying value of goodwill or indefinite-lived intangible assets exceed their fair value as determined using level 3 inputs under the U.S.
+Added: GAAP fair value hierarchy.
The reviews of fair value involve judgment and estimates, including projected revenues, long-term growth rates, royalty rates and discount rates.
2 unchanged sentences
GAAP fair value hierarchy.
−Removed: In performing the impairment analyses, the weighted-average cost of capital used in the discounted cash flow model was calculated based upon the fair value of the Company's debt and stock price with a debt-to-equity ratio comparable to the vehicle rental car industry.
−Removed: This present value model requires management to estimate future cash flows and forecasted EBITDA margins and capital investments of each reporting unit.
+Added: In performing the impairment analyses, the weighted-average cost of capital used in the discounted cash flow model was calculated based upon the fair value of the Company's debt and share price with a debt-to-equity ratio comparable to the vehicle rental car industry.
+Added: This present value model requires management to estimate future cash flows and forecasted EBITDA margins and
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: capital investments of each reporting unit.
The assumptions the Company used to estimate future cash flows and EBITDA margins are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant.
7 unchanged sentences
All indefinite-lived intangibles were noted to have fair values that exceeded their carrying values, the lowest of which was greater than 25 %.
−Removed: Technology-related Intangible and Other Assets
−Removed: Due to uncertainty surrounding the Company's financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases, the Company concluded in the second quarter of 2020 that there was an impairment of such technology-related intangible assets and capitalized cloud computing implementation costs and recorded an impairment charge of $ 193 million in its corporate operations representing an impairment of the carrying value of the abandoned portion of such assets as of June 30, 2020.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following summarizes the changes in the Company's goodwill by segment:
6 unchanged sentences
Goodwill disposal and other changes during the period — — —
−Removed: ( 1 ) — ( 1 )
Balance as of December 31, 2023
4 unchanged sentences
Balance as of January 1, 2022
−Removed: $ 1,029 $ 236 $ 1,265
+Added: Goodwill $ 1,029 $ 236 $ 1,265
Accumulated impairment losses
2 unchanged sentences
Goodwill disposal and other changes during the period ( 1 ) — ( 1 )
+Added: ( 1 ) — ( 1 )
Balance as of December 31, 2022
2 unchanged sentences
$ 1,028 $ 16 $ 1,044
−Removed: (1) Excludes goodwill of $ 36 million associated with Donlen that was classified as held for sale as of December 31, 2020.
−Removed: See Note 3, "Divestitures," for additional information.
HERTZ GLOBAL HOLDINGS, INC.
46 unchanged sentences
The Company's debt, including its available credit facilities, consists of the following ($ in millions) as of December 31, 2023 and 2022:
−Removed: Facility Weighted-Average Interest Rate as of December 31, 2022 Fixed or
+Added: Facility Weighted-Average Interest Rate as of December 31, 2023
Rate Maturity December 31,
1 unchanged sentence
Non-Vehicle Debt
+Added: First Lien RCF N/A Floating 6/2026 $ — $ —
Term B Loan 8.69 % Floating 6/2028 1,268 1,281
+Added: Incremental Term B Loan 9.09 % Floating 6/2028 500 —
Term C Loan 8.69 % Floating 6/2028 245 245
1 unchanged sentence
Senior Notes Due 2029 5.00 % Fixed 12/2029 1,000 1,000
−Removed: First Lien RCF N/A Floating 6/2026 — —
Other Non-Vehicle Debt (1)
23 unchanged sentences
4.39 % Fixed 9/2027 364 317
−Removed: Vehicle Debt - Other
−Removed: Repurchase Facility 6.17 % Fixed 1/2023 86 —
+Added: HVF III Series 2023-1 (2)
+Added: 6.17 % Fixed 6/2026 500 —
+Added: HVF III Series 2023-2 (2)
+Added: 6.30 % Fixed 9/2028 300 —
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Facility Weighted-Average Interest Rate as of December 31, 2022 Fixed or
+Added: Facility Weighted-Average Interest Rate as of December 31, 2023
Rate Maturity December 31,
2023 December 31,
+Added: HVF III Series 2023-3 (2)
+Added: 6.46 % Fixed 2/2027 500 —
+Added: HVF III Series 2023-4 (2)
+Added: 6.66 % Fixed 3/2029 500 —
+Added: Vehicle Debt - Other
+Added: Repurchase Facility N/A Fixed N/A — 86
European ABS (2)
6 unchanged sentences
Financing Facility 7.85 % Floating 1/2024-9/2027 173 101
−Removed: Toyota Financing Facility 2.20 % Floating 1/2023-8/2023 49 9
−Removed: Other Vehicle Debt 2.94 % Floating 1/2023-4/2025 76 93
+Added: Other Vehicle Debt (3)
+Added: 5.17 % Floating 1/2024-11/2027 110 125
Unamortized Debt Issuance Costs and Net (Discount) Premium ( 72 ) ( 62 )
5 unchanged sentences
The legal final maturity date is the date on which the outstanding principal of the relevant indebtedness is legally due and payable in full.
+Added: (3) Other vehicle debt is primarily comprised of $ 104 million and $ 76 million in finance lease obligations as of December 31, 2023 and 2022, respectively.
Non-Vehicle Debt
1 unchanged sentence
Pursuant to the Plan of Reorganization, on the Effective Date, Hertz entered into the First Lien Credit Agreement that provided for the following:
+Added: • the First Lien RCF for revolving loans and letters of credit up to an aggregate principal amount of $ 1.3 billion;
• Term B Loan for term loans in an aggregate principal amount of $ 1.3 billion;
• Term C Loan for term loans that are available to cash collateralize letters of credit in an aggregate principal amount of $ 245 million.
−Removed: • the First Lien RCF for revolving loans and letters of credit up to an aggregate principal amount of $ 1.3 billion.
−Removed: Term B Loan and Term C Loan :
−Removed: The Term Loans bear interest based on an alternate base rate as per the First Lien Credit Agreement or adjusted LIBOR, in each case plus an applicable margin of (i) 2.25 % in the case of the alternate base rate, or (ii) 3.25 % in the case of the adjusted LIBOR.
−Removed: In each case, the margin may change depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio").
−Removed: The Term Loans include provisions for a transition to an alternative benchmark index other than LIBOR.
−Removed: The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $ 3.3 million per quarter beginning on September 30, 2021 until maturity.
−Removed: The Term Loans mature on June 30, 2028.
−Removed: First Lien RCF :
−Removed: The First Lien RCF bears interest, at a benchmark rate plus spread.
−Removed: Loans under the facility are available in various currencies including USD, Eurodollar, Australian dollar, Canadian dollar and Sterling.
−Removed: Benchmark rates for the relevant currencies include, the relevant LIBOR rate, the Prime rate, the Bank Bill Swap Reference Bid Rate for Australian dollars, Canadian prime rate, an adjusted Canadian Dollar Offered Rate ("CDOR") or the Daily Simple Sterling Overnight Index Average ("SONIA").
−Removed: ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50 %.
−Removed: The First Lien RCF includes provisions for a transition to an alternative benchmark
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: index other than LIBOR and in March 2022, the First Lien RCF was amended to change the benchmark from USD LIBOR to the Secured Overnight Financing Rate ("SOFR") based rate.
−Removed: The margin for Euro currency Loans (including USD loans), SONIA loans and Canadian dollar BA Equivalent Loans, as defined in the First Lien Credit Agreement, is dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement.
−Removed: As of December 31, 2022, that margin was 3.00 %.
+Added: First Lien RCF :
+Added: The First Lien RCF bears interest at a benchmark rate plus spread.
+Added: The following table indicates the various currencies and benchmark rates applicable to loans under the First Lien RCF.
+Added: Currencies Benchmark rates
+Added: dollar Term SOFR (1) or Prime rate (as per terms of loan)
+Added: Eurodollar EURIBOR rate or Base rate (as per terms of loan)
+Added: Australian dollar Bank Bill Swap Reference Bid Rate
+Added: Canadian dollar Canadian prime rate or an adjusted Canadian Dollar Offered Rate ("CDOR") (as per terms of loan)
+Added: Sterling Daily Simple Sterling Overnight Index Average ("SONIA")
+Added: (1) Prior to March 2022, the First Lien RCF had a benchmark rate of USD LIBOR or Prime rate.
+Added: As of December 31, 2023, ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an applicable margin of 2.00 %.
+Added: In addition, the pricing for U.S.
+Added: dollar, Eurodollar, Sterling and Canadian dollar loans are equal to a local currency benchmark plus a margin of 3.00 %.
+Added: The above referenced margins are dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement.
In each case, the margin may change depending on Hertz’s Total Corporate Leverage Ratio.
The First Lien RCF matures on June 30, 2026.
−Removed: In March 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.3 billion to $ 1.5 billion and the sublimit for letters of credit from $ 1.1 billion to $ 1.4 billion and amended the First Lien RCF to change the benchmark from USD LIBOR to the SOFR based rate.
−Removed: In May 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.5 billion to $ 1.7 billion and the sublimit for letters of credit from $ 1.4 billion to $ 1.6 billion.
−Removed: In June 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.7 billion to $ 1.9 billion and the sublimit for letters of credit from $ 1.6 billion to $ 1.8 billion.
−Removed: In July 2022, Hertz increased the aggregate committed amount of the First Lien RCF by $ 55 million where the aggregate committed amount remains at $ 1.9 billion and the sublimit for letters of credit by $ 55 million where the aggregate sublimit remains at $ 1.8 billion.
+Added: Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.3 billion to $ 1.9 billion and the sublimit for letters of credit from $ 1.1 billion to $ 1.8 billion through various increases that occurred during the year ended December 31, 2022.
+Added: In March 2023, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.9 billion to $ 2.0 billion.
+Added: Term B Loan and Term C Loan :
+Added: In May 2023, the First Lien Credit Agreement was amended to change the benchmark interest rate on the Term Loans from USD LIBOR to term SOFR in connection with the cessation of USD LIBOR.
+Added: As per the amended First Lien Credit Agreement, the Term Loans bear interest based on an alternate base rate ("ABR") or term SOFR, in each case, plus an applicable margin of (i) 2.25 % in the case of the ABR, or (ii) 3.25 % in the case of term SOFR.
+Added: In each case, the margin may change depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio").
+Added: The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $ 3.3 million per quarter.
+Added: Each of the Term B Loan and Term C Loan mature on June 30, 2028.
+Added: Incremental Term B Loan:
+Added: In November 2023, the First Lien Credit Agreement was amended to provide for the Incremental Term B Loan in an aggregate principal amount of $ 500 million.
+Added: The Incremental Term B Loan bears interest based on an ABR or term SOFR, in each case, plus an applicable margin of (i) 2.75 % in the case of the ABR, or (ii) 3.75 % in the case of term SOFR.
+Added: The amended First Lien Credit Agreement requires the Incremental Term B Loan to be repaid in quarterly installments of $ 1.25 million beginning March 31, 2024 until maturity.
+Added: The Incremental Term B Loan matures on June 30, 2028.
2021 Senior Notes
2 unchanged sentences
subsidiaries that are guarantors under the First Lien Credit Agreement.
−Removed: Proceeds from the issuance of the Senior Notes Due 2026 and the Senior Notes Due 2029 were contributed to Hertz Global through a dividend distribution from Hertz to repurchase all outstanding shares of Hertz Global's Series A Preferred Stock.
−Removed: See Note 17, "Equity – Hertz Global."
−Removed: In June 2021, Hertz established a securitization platform, the HVF III U.S.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: In June 2021, Hertz established the HVF III securitization platform (the "HVF III U.S.
ABS Program") to facilitate its financing activities relating to vehicles used by Hertz in the U.S.
−Removed: daily vehicle rental operations.
−Removed: HVF III, a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF III U.S.
+Added: vehicle rental operations.
+Added: HVF III is the issuer of variable funding notes and medium-term notes under the HVF III U.S.
HVF III entered into a base indenture that permits it to issue term and variable funding rental car asset-backed securities, secured by a collateral pool consisting primarily of the rental vehicles used in the Company's U.S.
4 unchanged sentences
In June 2021, in connection with the issuance of the HVF III Series 2021 Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: From time to time, Hertz or any of its subsidiaries (all affiliates of HVF III), at their discretion, may purchase and retain any part or portion of an issued notes’ series or class within a series under the HVF III U.S.
+Added: ABS Program depending on market conditions and other factors at the time of issuance.
+Added: In addition, any retained notes issued under the HVF III U.S.
+Added: ABS Program may be sold to third parties at a subsequent date or may be sold and repurchased under the Repurchase Facilities, as disclosed below, in each case, depending on market conditions and other factors at the time.
References to the HVF III U.S.
4 unchanged sentences
HVF III Series 2021-A Notes:
−Removed: In June 2021, Hertz issued the Series 2021-A Class A Notes with an initial maximum principal amount of up to $ 2.8 billion.
−Removed: In December 2021, Hertz issued the Series 2021-A Class B Notes with a maximum principal amount of up to $ 188 million.
−Removed: The HVF III Series 2021- A Notes had an original maturity date of June 2023.
−Removed: In March 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.0 billion to $ 3.2 billion.
−Removed: In May 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.2 billion to $ 3.6 billion.
−Removed: In June 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.6 billion to $ 3.8 billion.
−Removed: Additionally, the maturity date of the Series 2021-A Notes Class A Notes was extended to June 2024.
−Removed: In July 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.8 billion to $ 3.9 billion.
+Added: HVF III increased the commitments for the Series 2021-A Notes through various increases during the year ended December 31, 2022, increasing the maximum principal amount that may be outstanding from $ 3.0 billion to $ 3.9 billion.
+Added: Additionally, in June 2022, the maturity date of the Series 2021-A Notes Class A Notes was extended to June 2024.
+Added: In June 2023, HVF III increased the commitments for the Series 2021-A Notes, increasing the maximum principal amount that may be outstanding from $ 3.9 billion to $ 4.1 billion.
+Added: Additionally, the maturity dates of the Series 2021-A Class A Notes and Class B Notes were extended to June 2025 and August 2025, respectively.
Vehicle Medium Term Notes
+Added: HVF III Series 2022-1 Notes and Series 2022-2 Notes :
+Added: In January 2022, HVF III issued the Series 2022-1 Notes and Series 2022-2 Notes in aggregate principal amounts of $ 750 million, respectively.
+Added: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Series 2022-1 Class D Notes and Series 2022-2 Class D Notes in aggregate principal amounts of $ 98 million, respectively.
+Added: The Series 2022-1 Class D Notes were subsequently sold to third parties in July and August 2022.
HVF III Series 2022-3 Notes :
−Removed: On the Effective Date, Hertz issued the Series 2021-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 2.0 billion.
+Added: In March 2022, HVF III issued the Series 2022-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 383 million.
+Added: At the time of issuance, Hertz, an affiliate
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 50 million which were subsequently sold to third parties in July 2022.
HVF III Series 2022-4 Notes :
−Removed: On the Effective Date, Hertz issued the Series 2021-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 2.0 billion.
+Added: In March 2022, HVF III issued the Series 2022-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 667 million.
+Added: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 87 million which were subsequently sold to third parties in August 2022.
HVF III Series 2022-5 Notes :
−Removed: In January 2022, Hertz issued the Series 2022-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 750 million.
−Removed: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 98 million which were subsequently sold to third parties in July and August 2022.
+Added: In March 2022, HVF III issued the Series 2022-5 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 364 million.
+Added: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 47 million.
HVF III Series 2023-1 Notes :
−Removed: In January 2022, Hertz issued the Series 2022-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 750 million.
−Removed: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 98 million.
+Added: In March 2023, HVF III issued the Series 2023-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 500 million.
+Added: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 40 million.
HVF III Series 2023-2 Notes :
−Removed: In March 2022, Hertz issued the Series 2022-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 383 million.
−Removed: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 50 million which were subsequently sold to third parties in July 2022.
+Added: In March 2023, HVF III issued the Series 2023-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 300 million.
HVF III Series 2023-3 Notes :
−Removed: In March 2022, Hertz issued the Series 2022-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 667 million.
−Removed: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 87 million which were subsequently sold to third parties in August 2022.
+Added: In August 2023, HVF III issued the Series 2023-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 500 million.
HVF III Series 2023-4 Notes :
−Removed: In March 2022, Hertz issued the Series 2022-5 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 364 million.
−Removed: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 47 million.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: In August 2023, HVF III issued the Series 2023-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 500 million.
There is subordination within each of the preceding series based on class.
−Removed: HVF III Various Series 2022 Class D Notes:
−Removed: At the time of the respective HVF III initial offerings disclosed above, Hertz purchased the Class D Notes.
−Removed: Accordingly, the related principal amounts below are eliminated in consolidation as of December 31, 2022.
+Added: HVF III Series 2022-2, Series 2022-5 and Series 2023-1 Class D Notes (the "Class D Notes") :
+Added: In September 2023, Hertz sold the Class D Notes to third parties.
(In millions) Aggregate Principal Amount
1 unchanged sentence
HVF III Series 2022-5 Class D Notes 47
+Added: HVF III Series 2023-1 Class D Notes 40
Vehicle Debt-Other
−Removed: Repurchase Facility
−Removed: In June 2022, Hertz entered 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.
−Removed: Transactions occurring under the Repurchase Facility are based on mutually agreeable terms and prevailing rates.
−Removed: 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 185 basis points and have a 30 -day tenor.
−Removed: The European ABS is the primary vehicle financing facility for the Company's vehicle rental operations in France, the Netherlands, Germany and Spain.
+Added: Repurchase Facilities
+Added: Beginning in 2022, Hertz entered into, and in the future may continue to enter into, the Repurchase Facilities, whereby Hertz can sell and repurchase at a pre-determined price any retained notes under the HVF III U.S.
+Added: Transactions occurring under the Repurchase Facilities are based on mutually agreeable terms and prevailing rates.
+Added: As of December 31, 2023, Hertz does not hold any retained notes under the HVF III U.S.
+Added: ABS Program and there were no repurchase transactions outstanding under the Repurchase Facilities.
+Added: The European ABS is the primary vehicle financing facility for the Company's vehicle rental operations in France, the Netherlands, Germany, Spain and Italy.
The lenders under the European ABS have been granted a security interest in the owned rental vehicles used in the Company's vehicle rental operations in these countries and certain contractual rights related to such vehicles.
−Removed: In April 2021, International Fleet Financing No.
−Removed: 2 BV ("IFF No.
−Removed: 2") entered into a comprehensive restructuring of the European ABS.
−Removed: The terms of the restructured European ABS provide for aggregate maximum borrowings of € 450 million and extend the maturity to April 2022.
−Removed: In December 2021, the European ABS was amended to increase the aggregate maximum borrowings to € 750 million and to extend the maturity to October 2023.
−Removed: In connection with the amendment, Hertz entered into a performance guarantee with respect to certain obligations of certain of its subsidiaries in their capacities as lessees, servicers and administrators under the European ABS.
−Removed: In December 2022, the European ABS was amended 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.
−Removed: In connection with the amendment, the Hertz performance guarantee was amended to accommodate certain obligations of its Italian subsidiaries in their capacities as lessees, servicers and administrators under the amended European ABS.
−Removed: Hertz Canadian Securitization
−Removed: In January 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A Notes which provide for aggregate maximum borrowings of CAD$ 350 million on a revolving basis, subject to availability under the borrowing base limitation.
−Removed: In June 2022, the Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$ 450 million, for a seasonal commitment period through November 2022.
−Removed: Following the expiration of the seasonal commitment period, aggregate maximum borrowings reverted to CAD$ 350 million.
−Removed: Additionally, the Hertz
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Canadian Securitization was amended to extend the maturity of the aggregate maximum borrowings of CAD$ 350 million to June 2024.
−Removed: In December 2022, Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$ 390 million, for a temporary commitment period through April 2023.
−Removed: Following the expiration of the temporary commitment period, aggregate maximum borrowings will revert to CAD$ 350 million.
+Added: In December 2022, the European ABS was amended 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.
+Added: In connection with the amendment, the Hertz performance guarantee was amended to accommodate certain obligations of its Italian subsidiaries in their capacities as lessees, servicers and administrators under the amended European ABS.
+Added: In September 2023, the European ABS was amended 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.
+Added: Hertz Canadian Securitization
+Added: Hertz maintains a financing through TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, for the purpose of financing its rental car fleet operations in Canada (the "Hertz Canadian Securitization").
+Added: In June 2022, the Hertz Canadian Securitization was amended to extend the maturity to June 2024.
+Added: In June 2023, the Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$ 475 million and to extend the maturity date to June 2025.
Australian Securitization
−Removed: HA Fleet Pty Limited, an indirect wholly-owned subsidiary of Hertz, is the issuer under the Australian Securitization.
−Removed: The Australian Securitization is the primary fleet financing facility for Hertz's vehicle rental operations in Australia.
+Added: Hertz maintains a financing through HA Fleet Pty.
+Added: Limited, an indirect wholly-owned subsidiary of Hertz, for the purpose of financing its rental car fleet operations in Australia (the "Australian Securitization").
+Added: HA Fleet Pty.
+Added: Limited serves as the issuer under the Australian Securitization.
The lender under the Australian Securitization has been granted a security interest primarily in the owned rental vehicles used in its vehicle rental operations in Australia and certain contractual rights related to such vehicles.
−Removed: In June 2021, the Australian Securitization was amended to provide for aggregate maximum borrowings of AUD$ 210 million and extended the maturity to April 2022.
In January 2022, the Australian Securitization was amended to increase the aggregate maximum borrowings to AUD$ 250 million and to extend the maturity to April 2024.
+Added: In June 2023, the Australian Securitization was amended to provide for aggregate maximum borrowings of AUD$ 340 million and to extend the maturity date to June 2025.
New Zealand RCF
−Removed: Hertz New Zealand Holdings Limited, an indirect wholly-owned subsidiary of Hertz, is the borrower under a credit agreement that provides for aggregate maximum borrowings on a revolving basis under an asset-based revolving credit facility (the “New Zealand RCF”).
−Removed: The New Zealand RCF is the primary vehicle financing facility for its vehicle rental operations in New Zealand.
−Removed: In May 2021, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to provide for aggregate maximum borrowings of NZD$ 60 million and to extend the maturity to June 2022.
−Removed: In April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to extend the maturity to June 2024.
−Removed: In October 2022, Hertz New Zealand Holdings Limited amended its credit agreement to provide for aggregate maximum borrowings up to NZD$ 85 million, for a seasonal commitment period through March 2023.
−Removed: Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to NZD$ 60 million.
+Added: Hertz maintains a financing through Hertz New Zealand Holdings Limited ("Hertz New Zealand"), an indirect wholly-owned subsidiary of Hertz, for the purpose of financing its rental car fleet operations in New Zealand.
+Added: Hertz New Zealand is the borrower under a credit agreement that provides for aggregate maximum borrowings on a revolving basis under an asset-based revolving credit facility (the “New Zealand RCF”).
+Added: In April 2022, the New Zealand RCF was amended to extend the maturity of the aggregate maximum borrowings of NZD$ 60 million to June 2024.
+Added: In August 2023, the New Zealand RCF was amended to provide for aggregate maximum borrowings of NZD$ 120 million and to extend the maturity date to June 2025.
Financing Facility
−Removed: In April 2021, a comprehensive restructuring of the U.K.
−Removed: Financing Facility was executed to provide for aggregate maximum borrowings of £ 100 million and to extend the maturity to April 2022.
−Removed: In April 2022, Hertz U.K.
−Removed: Limited amended the U.K.
−Removed: Financing Facility to provide for aggregate maximum borrowings of up to £ 120 million, for a seasonal commitment period through October 2022.
−Removed: Following the expiration of the seasonal commitment period, aggregate maximum borrowings reverted to £ 100 million.
−Removed: Additionally, the U.K.
+Added: In April 2022, the U.K.
Financing Facility was amended to extend the maturity of the aggregate maximum borrowings of £ 100 million to October 2023.
−Removed: Toyota Financing Facility
−Removed: In May 2021, Hertz U.K.
−Removed: Limited entered into the U.K.
−Removed: Toyota Financing Facility to finance the acquisition of certain motor vehicles which provides for aggregate maximum borrowings of £ 10 million maturing, upon extension, in June 2022.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: In March 2022, Hertz U.K.
−Removed: Limited amended the U.K.
−Removed: Toyota Financing Facility to increase aggregate maximum borrowings to £ 25 million and extended the maturity to October 2022.
−Removed: In July 2022, Hertz U.K.
−Removed: Limited amended the U.K.
−Removed: Toyota Financing Facility to increase aggregate maximum borrowings from £ 25 million to £ 42 million and extended the maturity to June 2023.
+Added: In June 2023, the U.K.
+Added: Financing Facility was amended to provide for aggregate maximum borrowings of £ 135 million and to extend the maturity date to November 2024.
Loss on Extinguishment of Debt
−Removed: The Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements.
−Removed: Loss on extinguishment of debt is presented in interest expense, net in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2020.
+Added: In June 2021, in accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S.
+Added: ABS Program and the HVIF U.S.
+Added: ABS Program were repaid in full and cancelled.
+Added: As a result, the Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements.
For the year ended December 31, 2021, loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the table below, in the accompanying consolidated statements of operations.
−Removed: There were no losses on extinguishment of debt recognized for the year ended December 31, 2022.
+Added: There were no losses on extinguishment of debt recognized for the years ended December 31, 2023 and 2022.
The following table reflects the amount of loss for each respective redemption/termination:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
Redemption/Termination (in millions) 2021
16 unchanged sentences
European Vehicle Notes 29
−Removed: European ABS — 5
Total Vehicle Debt 98
Total Loss on Extinguishment of Debt $ 199
−Removed: (1) On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court and the Company emerged from Chapter 11.
−Removed: In accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S.
−Removed: ABS Program and the HVIF U.S.
−Removed: ABS Program were repaid in full and cancelled.
(1) The loss on extinguishment is recorded in non-vehicle interest expense, net in the accompanying consolidated income statement for the year ended December 31, 2021.
15 unchanged sentences
With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding under such facility (i.e., the amount of debt that can be borrowed given the collateral possessed at such time).
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following facilities were available to the Company as of December 31, 2023 and are presented net of any outstanding letters of credit:
8 unchanged sentences
Hertz Canadian Securitization 10 —
+Added: Australian Securitization 30 1
+Added: New Zealand RCF 6 —
Financing Facility — —
−Removed: Toyota Financing Facility 2 —
+Added: Other Vehicle Debt 47 —
Total Vehicle Debt 2,603 1
Total $ 3,869 $ 1,267
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Letters of Credit
1 unchanged sentence
As of December 31, 2023, no capacity remains to issue additional letters of credit under the Term C Loan.
−Removed: Such letters of credit have been issued primarily to support the Company's insurance programs and to provide credit enhancement for the Company's asset-backed securitization facilities, as well as to support the Company's vehicle rental concessions and leaseholds.
+Added: Such letters of credit have been issued primarily to provide credit enhancement for the Company's asset-backed securitization facilities and to support the Company's insurance programs, as well as to support the Company's vehicle rental concessions and leaseholds.
As of December 31, 2023, none of the issued letters of credit have been drawn upon.
7 unchanged sentences
As of December 31, 2023 and 2022, IFF No.
−Removed: 2 had total assets of $ 1.3 billion and $ 734 million, respectively, comprised primarily of intercompany receivables, and total liabilities of $ 1.3 billion and $ 733 million, respectively, comprised primarily of debt.
+Added: 2 had total assets of $ 1.7 billion and $ 1.3 billion, respectively, comprised primarily of intercompany receivables, and total liabilities of $ 1.7 billion and $ 1.3 billion, respectively, comprised primarily of debt.
Covenant Compliance
−Removed: The First Lien Credit Agreement requires Hertz to comply with the following financial covenant:
+Added: The First Lien Credit Agreement r e quires Hertz 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.
−Removed: This financial covenant was effective beginning in the third quarter of 2021.
As of December 31, 2023, Hertz was in compliance with the First Lien Ratio.
−Removed: 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.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 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, restrictions on the incurrence of liens, indebtedness, asset dispositions and restricted payments.
3 unchanged sentences
Restricted Net Assets
−Removed: As a result of the contractual restrictions on Hertz and certain of its subsidiaries' ability to pay dividends (directly or indirectly) under various terms of its debt, as of December 31, 2022, the restricted net assets of the subsidiaries of Hertz and Hertz Global exceed 25 % of their total consolidated net assets, respectively.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Hertz and certain of its subsidiaries are subject to contractual restrictions under the terms of its debt, including restrictions on the ability to pay dividends (directly or indirectly).
+Added: As of December 31, 2023, the restricted net assets of the subsidiaries of Hertz and Hertz Global exceed 25 % of their total consolidated net assets, respectively.
Note 7— Employee Retirement Benefits
3 unchanged sentences
The majority of union employees have since discontinued participation in the Hertz Retirement Plan as the result of collective bargaining.
−Removed: Some of the Company’s international subsidiaries have defined benefit retirement plans or participate in various insured or multiemployer plans.
+Added: Some of the Company’s international subsidiaries have defined benefit retirement plans.
In certain countries, when the subsidiaries make the required funding payments, they have no further obligations under such plans.
−Removed: The Company's benefit plans are generally funded, except for certain non-qualified U.S.
−Removed: defined benefit plans and in Germany, France and Italy, where unfunded liabilities are recorded.
The Company also sponsors defined contribution plans for certain eligible U.S.
employees, where contributions are matched based on specific guidelines in the plans.
−Removed: Additionally, the Company sponsors postretirement health care and life insurance benefits for a limited number of employees with hire dates prior to January 1, 1990.
Management makes certain assumptions relating to discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates and other factors when determining amounts to be recognized.
11 unchanged sentences
The following tables set forth the funded status and the net periodic pension cost of the Hertz Retirement Plan and other U.S.
−Removed: based retirement plans, other postretirement benefit plans including health care and life insurance plans covering domestic (i.e., U.S.) employees and the retirement plans for international operations (“Non-U.S.”), together with amounts included in the accompanying consolidated balance sheets and statements of operations:
−Removed: Pension Benefits Postretirement
−Removed: Benefits (U.S.)
+Added: based retirement plans and the retirement plans for international operations (“Non-U.S.”), together with amounts included in the accompanying consolidated balance sheets and statements of operations:
+Added: Pension Benefits
(In millions) 2023 2022 2023 2022
10 unchanged sentences
Fair value of plan assets as of January 1 $ 338 $ 468 $ 131 $ 255
−Removed: Actual return gain on plan assets ( 103 ) 9 ( 91 ) 4 — —
+Added: Actual return gain (loss) on plan assets 28 ( 103 ) 6 ( 91 )
Company contributions — — 3 2
6 unchanged sentences
Plan assets (less than) in excess of the benefit obligation $ ( 31 ) $ ( 33 ) $ ( 49 ) $ ( 41 )
−Removed: In 2022, discount rates increased, resulting in actuarial gains for the U.S.
−Removed: pension and postretirement plans, partially offset by census data updates and experience.
+Added: In 2023, discount rates decreased, resulting in actuarial losses for the U.S.
+Added: pension plans, partially offset by changes in the inflation and mortality assumptions in the United Kingdom ("U.K.").
In 2022, discount rates increased, resulting in actuarial gains for the U.S.
−Removed: pension and postretirement plans.
−Removed: In addition, the Non-U.S.
−Removed: pension plans were revalued on new census data in 2021 resulting in an additional gain, which was mostly offset by a loss from an increase in the inflation assumption.
+Added: pension plans, partially offset by census data updates and experience.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Pension Benefits Postretirement
−Removed: Benefits (U.S.)
+Added: Pension Benefits
($ in millions) 2023 2022 2023 2022
9 unchanged sentences
Funded/(Unfunded) accrued pension or postretirement benefit
−Removed: 25 31 16 22 ( 10 ) ( 12 )
Net obligation recognized in the balance sheets
4 unchanged sentences
$ ( 2 ) $ 35 $ 14 $ ( 15 )
−Removed: Accumulated Benefit Obligation as of December 31 $ 371 $ 465 $ 171 $ 306 N/A N/A
+Added: Accumulated Benefit Obligation as of December 31 $ 373 $ 371 $ 190 $ 171
Weighted-average assumptions as of December 31
Discount rate 5.1 % 5.4 % 4.4 % 4.7 %
−Removed: Expected return on assets 6.0 % 4.5 % 5.2 % 3.0 % N/A N/A
−Removed: Average rate of increase in compensation — % 4.3 % 2.1 % 2.1 % N/A N/A
−Removed: Interest crediting rate 3.8 % 3.8 % N/A N/A N/A N/A
−Removed: Initial health care cost trend rate N/A N/A N/A N/A 6.1 % 5.6 %
−Removed: Ultimate health care cost trend rate N/A N/A N/A N/A 4.0 % 4.0 %
−Removed: Number of years to ultimate trend rate N/A N/A N/A N/A 24 25
+Added: Expected return on assets 6.2 % 6.0 % 5.2 % 5.2 %
+Added: Average rate of increase in compensation — % — % 2.2 % 2.1 %
+Added: Interest crediting rate 3.8 % 3.8 % N/A N/A
N/A - Not applicable
8 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The following table sets forth the net periodic pension and postretirement (including health care, life insurance and auto) expense charged to net income (loss).
+Added: The following table sets forth the net periodic pension expense charged to net income (loss).
The components of net periodic pension expense (benefit), other than service cost, were included in other (income) expense, net in the accompanying consolidated statements of operations.
−Removed: Pension Benefits Postretirement
−Removed: Benefits (U.S.)
+Added: Pension Benefits
Years Ended December 31,
12 unchanged sentences
Weighted-average assumed long-term rate of return on assets (January 1)
−Removed: 4.5 % 4.5 % 4.8 % 3.0 % 3.0 % 3.2 % N/A N/A N/A
+Added: 6.0 % 4.5 % 4.5 % 5.2 % 3.0 % 3.0 %
Weighted-average interest crediting rate for expense
−Removed: 3.8 % 3.8 % 3.8 % N/A N/A N/A N/A N/A N/A
−Removed: Initial health care cost trend rate
−Removed: N/A N/A N/A N/A N/A N/A 5.6 % 5.5 % 5.8 %
−Removed: Ultimate health care cost trend rate (rate to which cost trend is expected to decline)
−Removed: N/A N/A N/A N/A N/A N/A 4.0 % 4.5 % 4.5 %
−Removed: Number of years to ultimate trend rate
−Removed: N/A N/A N/A N/A N/A N/A 24 25 18
+Added: 3.8 % 3.8 % 3.8 % N/A N/A N/A
N/A - Not applicable
4 unchanged sentences
The Company has two major plans which reside in the U.S.
−Removed: and the United Kingdom.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Plan (the “Plan”) has a target asset allocation mix of 70 % in investments intended to hedge the impact of capital market movements ("Immunizing Portfolio Investments"), comprised primarily of fixed income securities, and 30 % in investments intended to earn more than the pension liability growth over the long-term ("Growth Portfolio Investments").
3 unchanged sentences
The Plan assumes a 6.2 % expected long-term annual weighted-average rate of return on assets.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The fair value measurements of the Company's U.S.
32 unchanged sentences
The protection portfolio is designed to partially hedge the interest rate and inflation expectation exposure of the liabilities which are measured on a local regulatory basis.
−Removed: The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the value of the liabilities
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: change and the allocations within the protection portfolio will be allowed to vary accordingly.
+Added: The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the value of the liabilities change and the allocations within the protection portfolio will be allowed to vary accordingly.
All of the invested assets of the U.K.
7 unchanged sentences
Plan assets are based upon inputs that reflect quoted prices for identical assets or liabilities in active markets that are observable (Level 1) and significant observable inputs that reflect quoted prices for similar assets or liabilities in active markets (Level 2).
−Removed: The fair value measurements of the U.K.
+Added: The fair value
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: measurements of the U.K.
Plan assets relate to common collective trusts and other pooled investment vehicles consisting of the following asset categories:
25 unchanged sentences
qualified pension plan.
−Removed: In 2022, the Company made no contributions to its U.S.
−Removed: non-qualified pension plans.
−Removed: In 2021, the Company made $ 24 million of contributions to its U.S.
+Added: In 2023 and 2022, the Company made no contributions to its U.S.
non-qualified pension plans.
−Removed: In 2022, the Company made no discretionary contributions to its U.K.
−Removed: In 2021, the Company made discretionary contributions of $ 3 million to its U.K.
−Removed: The Company does no t anticipate contributing to the U.S.
+Added: In 2023 and 2022, the Company made no discretionary contributions to its U.K.
+Added: The Company does no t currently anticipate contributing to the U.S.
qualified pension plan during 2024.
2 unchanged sentences
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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Estimated Future Benefit Payments
The following table presents estimated future benefit payments:
−Removed: (In millions) Pension Benefits Postretirement
−Removed: Benefits (U.S.)
−Removed: 2023 $ 32 $ 1
+Added: (In millions) Pension Benefits
2027 to 2031 221
−Removed: Multiemployer Pension Plans
−Removed: The Company contributes to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain of its union-represented employees.
−Removed: The risks of participating in such plans are different from the risks of a single-employer plan, in the following respects:
−Removed: a) Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
−Removed: b) If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
−Removed: c) If the Company ceases to have an obligation to contribute to the multiemployer plan in which the Company had been a contributing employer, the Company may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of its participation in the plan prior to the cessation of its obligation to contribute.
−Removed: The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.
−Removed: Amounts accrued for benefit payments under the Company's multiemployer pension plans of $ 20 million represent the net present value of projected liabilities as of December 31, 2022.
−Removed: The Company's participation in multiemployer plans is outlined in the table below.
−Removed: For plans that are not individually significant to the Company, the total amount of contributions is presented in the aggregate.
−Removed: Plan Number Pension
−Removed: Protection Act
−Removed: Zone Status FIP /
−Removed: Pending /Implemented (1)
−Removed: Contributions by
−Removed: The Hertz Corporation
−Removed: (In millions) Surcharge Imposed Expiration
−Removed: Bargaining Agreements
−Removed: Pension Fund 2022 2021 2022 2021 2020
−Removed: Western Conference of Teamsters
−Removed: 91-6145047 Green Green N/A $ 5 $ 4 $ 5 N/A 09/30/2024
−Removed: Other Plans — 1 2
−Removed: Total Contributions $ 5 $ 5 $ 7
−Removed: N/A Not applicable
−Removed: (1) Indicates whether a Funding Improvement Plan, as required under the Code to be adopted by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the plan year that ended in 2022.
+Added: Total estimated future benefits payments $ 413
HERTZ GLOBAL HOLDINGS, INC.
3 unchanged sentences
Note 8— Stock-Based Compensation
−Removed: The stock-based compensation expense associated with the Hertz Holdings stock-based compensation plans is pushed down from Hertz Global and recorded on the books at the Hertz level.
+Added: The stock-based compensation expense associated with the Hertz Holdings stock-based compensation plans is pushed down from Hertz Global and recorded at Hertz.
2021 Omnibus Incentive Plan
2 unchanged sentences
The Company initially authorized 62,250,055 shares of its common stock pursuant to awards granted under the 2021 Omnibus Plan.
−Removed: In addition, beginning on June 30, 2022, and ending on June 20, 2031 (an “Evergreen Date”), the total authorized shares under the 2021 Omnibus Plan will automatically increase by a number of shares equal to 2 % of the total number of shares of the Company's common stock outstanding on the June 29th immediately preceding the applicable Evergreen Date.
−Removed: Notwithstanding the foregoing, the Company's Board may act prior to the Evergreen Date of a given year to provide that there will be no automatic increase for such year, or that the increase for such year will be a lesser number of shares.
−Removed: As of December 31, 2022, 41,866,495 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan.
−Removed: A summary of the total compensation expense and related income tax benefits recognized for grants made under the 2021 Omnibus Plan is as follows:
+Added: In addition, beginning on June 30, 2022, and ending on June 20, 2031 (an “Evergreen Date”), the total authorized shares under the 2021 Omnibus Plan will automatically increase by a number of shares equal to 2 % of the total number of shares of the Company's common stock outstanding on the June 29th immediately preceding the applicable Evergreen Date (the "Evergreen Increase").
+Added: Notwithstanding the foregoing, the Company's Board may act prior to the Evergreen Date of a given year to provide that there will be no Evergreen Increase for such year, or that the increase for such year will be a lesser number of shares.
+Added: As of December 31, 2023, 51,394,974 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan , which reflects application of the Evergreen Increase as prescribed by the 2021 Omnibus Plan in each of June 2022 and 2023.
+Added: Vesting of the outstanding equity awards is also subject to accelerated vesting as set forth in the 2021 Omnibus Plan.
+Added: A summary of the total employee compensation expense and related income tax benefits recognized for grants made under the 2021 Omnibus Plan is as follows:
Years Ended December 31,
(In millions) 2023 2022 2021
−Removed: Compensation expense $ 129 $ 7
+Added: Employee compensation expense $ 85 $ 129 $ 7
Income tax benefit ( 8 ) ( 7 ) ( 2 )
−Removed: Total $ 122 $ 5
−Removed: As of December 31, 2022, there was $ 214 million of total unrecognized compensation cost expected to be recognized over the remaining 2.2 years, on a weighted average basis, of the requisite service period that began on the grant dates.
+Added: Employee compensation expense, net $ 77 $ 122 $ 5
+Added: As of December 31, 2023, there was $ 179 million of total unrecognized compensation cost expected to be recognized over the remaining 2.1 years, on a weighted average basis, of the requisite service period that began on the grant dates of outstanding awards.
The 2021 Omnibus Plan provides for the award of stock options, stock appreciation rights ("SARs"), performance stock, PSUs, performance units ("PUs"), restricted stock, RSUs, share awards and deferred stock units to eligible recipients.
Under the 2021 Omnibus Plan, the Compensation Committee of the Board (the "Compensation Committee") has the authority to determine the eligible recipients to whom awards may be granted, the types of awards and their terms or conditions.
+Added: The Board exercises these rights for certain executive officers.
Stock Options and SARs
2 unchanged sentences
SARs may be granted to participants in tandem with stock options or on their own.
−Removed: Unless otherwise determined by the Compensation Committee at or after the grant date, tandem SARs will have substantially similar terms as the stock options with which they are granted.
−Removed: Generally, each SAR will entitle the participant upon exercise to an amount (in cash, shares or a combination of cash and shares, as determined by the Compensation Committee) equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share of common stock, over (B) the strike price per share, times (ii) the number of shares of common stock covered by the SAR.
+Added: Unless otherwise determined by the Compensation Committee or Board at or after the grant date, tandem SARs will have substantially similar terms as the stock options with which they are granted.
+Added: Generally, each SAR will entitle the participant upon exercise to an amount (in cash, shares or a combination of cash and shares, as determined by the Compensation Committee or Board) equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share of
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: common stock, over (B) the strike price per share, times (ii) the number of shares of common stock covered by the SAR.
The Company accounts for stock options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period.
The value of each stock option award is estimated on the grant date using a Black-Scholes option valuation model that incorporates the assumptions noted in the following table.
−Removed: The Company calculates the expected volatility based on the historical movement of its stock price.
+Added: The Company calculates the expected volatility based on the historical movement of its share price.
Assumption 2021
17 unchanged sentences
Performance Stock Awards, Performance Stock Units and Performance Units
−Removed: PSAs, PSUs and PUs granted under the 2021 Omnibus Plan will vest based on the achievement of predetermined performance goals over performance periods determined by the Compensation Committee or upon the occurrence of certain events, as determined by the Compensation Committee.
+Added: PSAs, PSUs and PUs granted under the 2021 Omnibus Plan will vest based on the achievement of predetermined performance goals over performance periods determined by the Compensation Committee or Board or upon the occurrence of certain events, as determined by the Compensation Committee or Board.
PSAs are awards of common stock that are subject to forfeiture until predetermined performance conditions have been achieved.
−Removed: A PSU is a contractual right to receive a stated number of shares of common stock, or if provided by the Compensation Committee on or after the grant date, cash equal to the fair market value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, which right is forfeitable until the achievement of predetermined performance conditions.
+Added: A PSU is a contractual right to receive a stated number of shares of common stock, or if provided by the Compensation Committee or Board on or after the grant date, cash equal to the fair market value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, which right is forfeitable until the achievement of predetermined performance conditions.
PUs represent the right to receive a cash denominated award, payable in cash or shares of common stock or a combination thereof, and are forfeitable until the achievement of predetermined performance conditions.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A summary of the PSU activity as of December 31, 2023 under the 2021 Omnibus Plan is presented below:
7 unchanged sentences
Outstanding as of December 31, 2023 9,102,738 17.52 95
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(1) Presented assuming the issuance at the original target award amount ( 100 %).
Compensation expense for PSUs is based on the grant date fair value.
−Removed: For grants issued in 2022, vesting eligibility is based on market, performance and service conditions of one to five years .
+Added: For grants issued in 2023, vesting eligibility is based on market, performance and service conditions of two to three years .
Accordingly, the number of shares issued at the end of the performance period could range between 0 % and 200 % of the original target award amount ( 100 %) disclosed in the table above.
−Removed: Certain of these PSUs were valued on the grant date using a Monte Carlo simulation model that incorporates the assumptions noted in the following table:
+Added: Certain PSUs were valued on the grant date using a Monte Carlo simulation model that incorporates the assumptions noted in the following table:
+Added: Assumption 2022
Expected volatility 68 %
5 unchanged sentences
Restricted Stock and Restricted Stock Units
−Removed: Restricted stock and RSUs granted under the 2021 Omnibus Plan vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee.
+Added: Restricted stock and RSUs granted under the 2021 Omnibus Plan vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee or Board.
Restricted stock and RSUs are subject to forfeiture until vested.
Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period.
−Removed: RSU grants issued in 2022 vest over a period of two to four years .
−Removed: For grants issued in 2021, the vesting period is three years except for 500,000 shares that vested in the first half of 2022.
+Added: RSU grants issued in 2023 vest ratably over a period of primarily three to four years .
A summary of RSU activity as of and for the year ended December 31, 2023 under the 2021 Omnibus Plan is presented below:
7 unchanged sentences
Outstanding as of December 31, 2023 6,314,564 15.71 66
−Removed: Additional information pertaining to RSU activity under the 2021 Omnibus Plan was as follows:
−Removed: Years Ended December 31,
−Removed: Total fair value of awards that vested (in millions) $ 49 $ —
−Removed: Weighted-average grant-date fair value of awards granted $ 19.94 $ 26.17
−Removed: Deferred Stock Units
−Removed: Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date.
−Removed: As of December 31, 2022 and 2021, there were
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: approximately 68,000 and 24,000 outstanding shares, respectively, of deferred stock units under the 2021 Omnibus Plan.
+Added: Additional information pertaining to RSU activity under the 2021 Omnibus Plan is as follows:
+Added: Years Ended December 31,
+Added: 2023 2022 2021
+Added: Total fair value of awards that vested (in millions) $ 27 $ 49 $ —
+Added: Weighted-average grant-date fair value of awards granted $ 13.87 $ 19.94 26.17
+Added: Deferred Stock Units
+Added: Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee or Board in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date.
+Added: As of December 31, 2023 and 2022, there were approximately 114,000 and 68,000 outstanding shares, respectively, of deferred stock units under the 2021 Omnibus Plan.
Note 9— Leases
15 unchanged sentences
Additionally, the Company charges for variable services primarily consisting of tolls, refueling and recharging during the rental period, and for fees associated with the early or late termination of the vehicle lease.
−Removed: The Company mitigates residual value risk of its revenue earning vehicles by utilizing manufacturer repurchase and guaranteed depreciation programs, using sophisticated vehicle diagnostic and repair equipment to maintain the condition of its vehicles and through periodic reviews of vehicle depreciation rates based on management's ongoing assessment of present and estimated future market conditions.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020:
+Added: mitigates residual value risk of its revenue earning vehicles by utilizing manufacturer repurchase and guaranteed depreciation programs, using sophisticated vehicle diagnostic and repair equipment to maintain the condition of its vehicles and through periodic reviews of vehicle depreciation rates based on management's ongoing assessment of present and estimated future market conditions.
+Added: The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying consolidated statements of operations for each of the years ended December 31, 2023, 2022 and 2021:
(In millions) 2023 2022 2021
25 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The following table summarizes the amount of lease costs incurred by the Company for the years ended December 31, 2022, 2021 and 2020:
+Added: The following table summarizes the amount of lease costs incurred by the Company for each of the years ended December 31, 2023, 2022 and 2021:
Years ended December 31,
16 unchanged sentences
Operating lease liabilities as of December 31, 2023 $ 2,142
−Removed: Note 10— Restructuring
−Removed: Europe Restructuring
−Removed: Due to the impact from COVID-19 and reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment.
−Removed: The total number of employees affected for the year ended December 31, 2021 was approximately 900 .
−Removed: The program was substantially completed in 2021.
−Removed: Restructuring
−Removed: Due to the impact from COVID-19, the Company initiated a restructuring program beginning in April 2020, affecting approximately 11,000 U.S.
−Removed: employees in its Americas RAC segment and corporate operations.
−Removed: This program was substantially completed in the third quarter of 2020.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Restructuring Charges
−Removed: Restructuring charges under these programs are as follows:
−Removed: Years ended December 31,
−Removed: (In millions) 2021 2020
−Removed: Termination benefits $ 27 $ 37
−Removed: Lease and contract terminations $ 3 —
−Removed: Facility closures 2 —
−Removed: Total $ 32 $ 37
−Removed: Years ended December 31,
−Removed: (In millions) 2021 2020
−Removed: Direct vehicle and operating $ 16 $ 25
−Removed: Selling, general and administrative 16 12
−Removed: Total $ 32 $ 37
−Removed: Years ended December 31,
−Removed: (In millions) 2021 2020
−Removed: Americas RAC segment $ — $ 34
−Removed: International RAC segment 32 —
−Removed: Corporate — 3
−Removed: Total $ 32 $ 37
−Removed: The tables above do not include pension-related settlement charges incurred during the year ended December 31, 2020.
−Removed: The following table summarizes the activity affecting the restructuring accrual, which is recorded in accrued liabilities in the accompanying consolidated balance sheet.
−Removed: (In millions) Termination
−Removed: Benefits Other Total
−Removed: Balance as of January 1, 2021 $ — $ — $ —
−Removed: Charges incurred 27 5 32
−Removed: Cash payments ( 32 ) — ( 32 )
−Removed: Other non-cash reductions — ( 3 ) ( 3 )
−Removed: Reclassified from liabilities subject to compromise (1)
−Removed: Balance as of December 31, 2021 $ 2 $ 2 $ 4
−Removed: (1) As a result of filing the Chapter 11 Cases, the Company classified $ 7 million of restructuring charges to liabilities subject to compromise during 2020.
−Removed: On the Effective Date, in connection with the Plan of Reorganization, the Company reclassified $ 7 million of accrued and unpaid restructuring charges from liabilities subject to compromise.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10— Income Tax (Provision) Benefit
5 unchanged sentences
Total income (loss) before income taxes $ 286 $ 2,449 $ 683
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31,
55 unchanged sentences
deferred tax liabilities that could be realized within the carry forward periods.
−Removed: As of December 31, 2022, the Company has approximately $ 164 million of tax-effected U.S.
−Removed: federal capital loss carryforwards of which a valuation allowance of approximately $ 162 million has been recorded.
As of December 31, 2023, the Company has approximately $ 223 million of tax-effected state net operating loss carryforwards.
2 unchanged sentences
The Company has approximately $ 36 million in state tax credits for which a full valuation allowance is recorded.
−Removed: The state tax credits expire over various years beginning in 2023 depending upon the period when they
+Added: The state tax credits expire over various years beginning in 2028.
+Added: The Company has approximately $ 40 million of tax-effected deferred interest expense which has an indefinite carryforward period.
+Added: The tax effected amounts for all state tax attributes are net of federal benefit.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: were generated and the particular jurisdiction.
−Removed: The Company has approximately $ 19 million of tax-effected deferred interest expense which has an indefinite carryforward period.
−Removed: The Company has approximately $ 27 million of tax effected state capital losses that are fully offset by a valuation allowance.
−Removed: The tax effected amounts for all state tax attributes are net of federal benefit.
As of December 31, 2023, the Company has approximately $ 225 million of tax-effected foreign net operating loss carry forwards.
3 unchanged sentences
The Company has approximately $ 15 million of tax-effected foreign deferred interest which has an indefinite carryforward period.
−Removed: The Company has approximately $ 3 million of tax-effected foreign capital loss carryforwards which a full valuation allowance has been recorded.
−Removed: The Company recorded a valuation allowance against most of our deferred tax assets for several European operations as of both December 31, 2022, and December 31, 2021.
−Removed: We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.
−Removed: However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance will no longer be needed.
−Removed: Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.
−Removed: However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.
+Added: The deferred interest is offset, by a valuation allowance of $ 15 million.
+Added: The Company has approximately $ 3 million of tax-effected foreign capital loss carryforwards for which a full valuation allowance has been recorded.
Due to the ownership changes before and upon emergence from Chapter 11, the utilization of the Company's federal, state and foreign NOLs may be subject to limitations.
8 unchanged sentences
Change in state rates, net of federal effect ( 3 ) — 2
+Added: Foreign tax rate differential 2 — —
Change in foreign statutory rates — — ( 2 )
4 unchanged sentences
Change in fair value of Public Warrants
+Added: ( 14 ) ( 7 ) 22
Non-deductible bankruptcy expenses — — 15
2 unchanged sentences
tax on foreign earnings — 1 2
+Added: Nondeductible officer compensation
Effective tax rate - Hertz Global
+Added: ( 115 ) 16 47
Hertz Holdings exclusive items (1)
+Added: ( 153 ) 6 ( 25 )
Effective tax rate - Hertz
+Added: ( 268 ) % 22 % 22 %
+Added: (1) Represents the tax rate differential due to the exclusion of the change in fair value of Public Warrants from Hertz's income (loss) before income taxes.
+Added: The change in tax provision in 2023 compared to 2022 is driven by lower pre-tax income in 2023, benefits from EV credits generated in 2023, the release of valuation allowances in 2023 primarily related to the characterization of the loss on the restructuring of European operations (as disclosed below) and the non-taxable change in the fair value of Public Warrants.
+Added: The change in tax provision in 2022 compared to 2021 was primarily driven by improvements in financial performance in 2022, as well as the non-taxable change in fair value of Public Warrants, the tax benefits associated with the restructuring in Europe recognized in 2021, the impact of changes in state and foreign valuation allowances, and non-deductible bankruptcy costs incurred in 2021.
+Added: Hertz Holdings exclusive items are comprised of transactions specific to Hertz Holdings only.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The change in tax provision in 2022 compared to 2021 is driven by improvements in financial performance in 2022, as well as the non-taxable change in fair value of Public Warrants, the 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.
−Removed: Hertz Holdings exclusive items are comprised of transactions specific to Hertz Holdings only.
−Removed: The Company recorded a tax provision in 2021 compared to a tax benefit in 2020.
−Removed: The change was primarily driven by improvements in the Company's financial performance in 2021, changes in the mix of earnings and losses in jurisdictions for which no tax benefit can be recognized, non-deductible bankruptcy expenses, and reduced by the tax benefits of the European reorganization.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
10 unchanged sentences
Net, after-tax interest and penalties were accrued as a component of tax in the Company's consolidated balance sheet in the amount of $ 8 million and $ 7 million as of December 31, 2023 and 2022, respectively.
−Removed: During 2021 as part of a restructuring of European operations, we generated a tax loss of approximately $ 1.3 billion, which was characterized as a capital loss in the 2021 provision.
−Removed: The Company is in the process of obtaining a pre-filing agreement with the Internal Revenue Services to determine whether the capital loss qualifies as an ordinary loss.
−Removed: It is reasonably possible that the total amounts of unrecognized tax benefits will significantly decrease by approximately $ 190 million within 12 months of our reporting date if the IRS confirms that the loss we generated is ordinary in nature.
+Added: During 2021, as part of a restructuring of European operations, we generated a tax loss of approximately $ 1.3 billion, which was initially characterized as a capital loss in the 2021 provision.
+Added: On February 9, 2023, the Company and the IRS agreed to the amount and to the character of the loss as ordinary.
+Added: This resulted in a reduction in the amount of loss and a release of valuation allowances for a net benefit of $ 163 million in 2023.
The Company is subject to examination by taxing authorities throughout the world.
1 unchanged sentence
Additionally, the Company is under audit in several U.S.
−Removed: states and other foreign jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances.
−Removed: During 2020, the IRS proposed transfer pricing adjustments to the Company's 2014 and 2015 tax years, for which the company is pursuing competent authority relief.
+Added: states and other foreign jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or unforeseen circumstances.
The Company's assumptions and estimates pertaining to uncertain tax positions require significant judgment.
It is possible that the tax authorities could challenge the Company's estimates and assumptions used to assess the tax benefits, and the actual amount of the tax benefits related to uncertain tax positions may differ materially from these estimates.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company has provided for deferred taxes on undistributed earnings of foreign subsidiaries.
However, it is not practicable to estimate the deferred taxes on other differences on investments in foreign subsidiaries.
+Added: On December 15, 2022, the European Union ("EU") Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development ("OECD") Pillar Two Framework.
+Added: The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive.
+Added: A number of other countries have or are expected to implement similar legislation with varying effective dates in the future.
+Added: The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries.
Note 11— Financial Instruments
The Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates.
−Removed: Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements.
+Added: Although the instruments utilized involve
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements.
The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective.
1 unchanged sentence
None of the Company's financial instruments have been designated as hedging instruments as of December 31, 2023 and 2022.
+Added: The Company classifies cash flows from financial instruments according to the classification of the cash flows of the economically hedged item(s).
Interest Rate Risk
9 unchanged sentences
Interest rate instruments (2)
+Added: $ 10 $ 140 $ — $ —
Foreign currency forward contracts 5 1 2 2
1 unchanged sentence
(1) All asset derivatives are recorded in prepaid expenses and other assets and all liability derivatives are recorded in accrued liabilities in the accompanying consolidated balance sheets.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (2) The activity in 2023 is primarily due to net cash received on monthly settlements, including the sale of interest rate caps disclosed below.
The following table summarizes the gains or (losses) on financial instruments for the period indicated:
4 unchanged sentences
$ ( 6 ) $ 127 $ 3
−Removed: Foreign currency forward contracts Other (income) expense, net (2)
−Removed: ( 2 ) 2 ( 3 )
+Added: Foreign currency forward contracts Selling, general and administrative expense (2)
$ 2 $ 125 $ 5
(1) In 2021, $ 6 million of gains on interest rate instruments were recorded in other (income) expense, net, offset by $ 3 million of losses on interest rate instruments which were recorded in selling, general and administrative expense.
−Removed: (2) In 2020, all gains (losses) on financial instruments were recorded in selling, general and administrative expense.
+Added: (2) In 2022 and 2021, all gains (losses) on foreign currency forward contracts were recorded in other (income) expense, net.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: In the first quarter of 2023, the Company sold certain of its interest rate caps resulting in a net gain of $ 10 million based on the recognition of a $ 98 million realized gain on the unwind, of which $ 88 million was previously unrealized.
The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with their counterparties.
14 unchanged sentences
Total $ 15,829 $ 15,163 $ 13,983 $ 12,989
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
6 unchanged sentences
The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts.
−Removed: The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e., Level 1 inputs).
+Added: The Company determines the fair value of cash
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e., Level 1 inputs).
Public Warrants
3 unchanged sentences
The Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy.
−Removed: For the years ended December 31, 2022 and 2021, the fair value adjustments resulted in a gain of $ 704 million and a loss of $ 627 million, respectively, and were recorded in change in fair value of Public Warrants in the accompanying consolidated statements of operations for Hertz Global for the years ended December 31, 2022 and 2021.
+Added: For the years ended December 31, 2023, 2022 and 2021, the fair value adjustments resulted in gains of $ 163 million and $ 704 million and a loss of $ 627 million, respectively, and were recorded in change in fair value of Public Warrants in the accompanying consolidated statements of operations for Hertz Global.
Financial Instruments
The fair value of the Company's financial instruments as of December 31, 2023 and 2022 are disclosed in Note 11, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
+Added: In response to management's determination that the supply of EVs in the Company's fleet exceeded customer demand, elevated EV damage and collision costs and a decline in residual values, the EV Disposal Group has been classified as held for sale as of December 31, 2023.
+Added: The EV Disposal Group has been recorded at the lower of carrying value or fair value (as determined using level 2 inputs) less costs to sell.
+Added: See Note 4, "Revenue Earning Vehicles," for additional information.
Note 13— Accumulated Other Comprehensive Income (Loss)
6 unchanged sentences
Balance as of December 31, 2023 $ ( 95 ) $ ( 134 ) $ ( 19 ) $ ( 248 )
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In millions) Pension and Other Post-Employment Benefits Foreign Currency Items Unrealized Losses from Currency Translation Adjustments on Terminated Net Investment Hedges Accumulated Other Comprehensive Income (Loss)
11 unchanged sentences
The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs.
−Removed: As of December 31, 2022 and 2021, the Company's liability recorded for self-insured liabilities was $ 472 million and $ 463 million, respectively.
+Added: As of December 31, 2023 and 2022, the Company's liability recorded for self-insured liabilities was $ 471 million and $ 472 million, of which $ 336 million and $ 326 million relates to liabilities incurred by the Company's Americas RAC operations, respectively.
The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions.
The liability is subject to significant uncertainties.
−Removed: The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes.
+Added: The adequacy of the liability is monitored quarterly based on evolving accident claim history and insurance related state legislation changes.
If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.
1 unchanged sentence
From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business.
−Removed: The Company has summarized below the material legal proceedings to
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: which the Company was a party during the year ended December 31, 2022 or the period after December 31, 2022, but before the filing of this 2022 Annual Report.
−Removed: Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250 % Unsecured Notes due 2022 (the "2022 Notes"), (2) 5.500 % Unsecured Notes due 2024 (the "2024 Notes"), (3) 7.125 % Unsecured Notes due 2026 (the "2026 Notes"), and (4) 6.000 % Unsecured Notes due 2028 (the "2028 Notes") issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation and multiple direct and indirect subsidiaries thereof (collectively referred to in this summary as “Defendants”).
+Added: The Company has summarized below the material legal proceedings to which the Company was a party during the year ended December 31, 2023 or the period after December 31, 2023, but before the filing of this 2023 Annual Report.
+Added: Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250 % Unsecured Notes due 2022 (the "2022 Notes"), (2) 5.500 % Unsecured Notes due 2024 (the "2024 Notes"), (3) 7.125 % Unsecured Notes due 2026 (the "2026 Notes"), and (4) 6.000 % Unsecured Notes due 2028 (the "2028 Notes") issued by The Hertz Corporation (collectively, the “Unsecured Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation and multiple direct and indirect subsidiaries thereof (collectively referred to in this summary as “Defendants”).
The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v.
2 unchanged sentences
21-50995 (MFW).
−Removed: The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to payment of certain redemption premiums and post-petition interest that they assert total approximately $ 272 million or, in the alternative, are entitled to payment of post-petition interest at a contractual rate that they assert total approximately $ 125 million.
+Added: The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to payment of certain redemption premiums and post-petition interest that they assert total approximately $ 272 million or, in the alternative, are entitled to payment of post-petition interest at a contractual rate that they assert totals approximately $ 125 million.
The Complaint also asserts the right to pre-judgment interest from July 1, 2021, to the date of any judgment.
−Removed: On December 22, 2021, the Bankruptcy Court dismissed Wells Fargo’s claims with respect to (i) the redemption premium allegedly owed on the 2022 and 2024 Notes and (ii) post-petition interest at the contract rate.
+Added: On December 22, 2021, the Bankruptcy Court dismissed Wells Fargo’s claims with respect to (i) the redemption premium allegedly owed on
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: the 2022 and 2024 Notes and (ii) post-petition interest at the contract rate.
On November 9, 2022, the Bankruptcy Court ruled that the make-whole premium is the same as unmatured interest and is disallowed under the U.S.
2 unchanged sentences
Court of Appeals for the Third Circuit (the “Third Circuit”) and, on January 25, 2023, the Third Circuit accepted Wells Fargo’s appeal.
−Removed: The Defendants intend to continue to vigorously defend against the claims in this matter through the appellate process.
−Removed: The Company cannot predict the ultimate outcome or timing of this litigation.
−Removed: Claims Related to Alleged False Arrests - A group of claims involving allegations that the police detained or arrested individuals in error after the Company reported rental cars as stolen have been advanced against the Company.
+Added: The Third Circuit held oral argument for this appeal on October 25, 2023 and the parties are awaiting the Third Circuit's decision.
+Added: The Company cannot predict the ultimate outcome or timing of this litigation, however an adverse ruling by the Third Circuit, followed by an entry of judgement against Hertz by the Bankruptcy Court could have a material adverse effect on the Company's financial condition, results of operations or cash flows.
+Added: Claims Related to Alleged False Arrests - A group of claims involving allegations that the police detained or arrested individuals in error after the Company reported rental cars as stolen were previously advanced against the Company.
These claims first arose from actions allegedly taken by the Company prior to its emergence from bankruptcy reorganization;
−Removed: some claims allege post-emergence behavior by the Company.
−Removed: These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain members of government.
+Added: some claims alleged post-emergence behavior by the Company.
+Added: These claims have been the subject of press coverage and the Company has received government inquiries on the matter.
The Company has policies to help ensure the proper treatment of its customers and to seek to protect itself against the theft of its services or assets, and has taken significant steps to modernize and update those policies.
12 unchanged sentences
2022-015316-CA-1, were dismissed with prejudice.
−Removed: In the small number of claims remaining, the Company continues to vigorously defend itself and believes that the ultimate resolution of such remaining claims will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
+Added: The Company continues to vigorously defend itself and believes that the ultimate resolution of any remaining claims will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
Relatedly, in May 2022, the Company filed a complaint against several of its insurers seeking a determination of its rights under its commercial general liability, and directors and officers liability, insurance policies for these alleged claims in a declaratory judgment action pending in Delaware Superior Court, Hertz Global Holdings, Inc., et al.
1 unchanged sentence
N22C-05-130 MMJ (CCLD) .
−Removed: The Company believes that a meaningful portion of the amount being paid for the Settlements will ultimately be recovered from its insurance carriers.
+Added: On June 30, 2023, Hertz entered into a confidential settlement with ACE American Insurance Company.
+Added: The case is ongoing against the remaining insurers.
+Added: Share Repurchase Program Litigation - On May 11, 2023, Angelo Cascia, a purported stockholder of Hertz Global, filed a putative class and derivative lawsuit in the Delaware Court of Chancery against certain current directors of Hertz Global, Knighthead Capital Management, LLC, Certares Opportunities LLC, and CK Amarillo LP.
+Added: The claims in the complaint relate to the Company’s share repurchase programs approved in November 2021 and June 2022.
+Added: Among other allegations, the plaintiff claims Board members breached their fiduciary duties in approving these share repurchase programs, and that Knighthead, Certares, and CK Amarillo were unjustly enriched because they gained a majority stake in Hertz Global as a result of share repurchases.
+Added: Defendants’ motion to dismiss the complaint was filed on July 24, 2023.
+Added: Plaintiff filed an answering brief on December 15, 2023.
The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated.
3 unchanged sentences
It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved.
−Removed: Accordingly, it is possible that an adverse
+Added: Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.
−Removed: Other Proceedings
−Removed: Litigation Against Former Executives - The Company filed litigation in the U.S.
−Removed: District Court for the District of New Jersey against former executives Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against former executive Scott Sider on March 28, 2019.
−Removed: The complaints predominantly alleged breach of contract and sought repayment of incentive-based compensation received by the defendants in connection with restatements included in the former Hertz Global Holdings, Inc.
−Removed: ("Old Hertz Holdings") Form 10-K for the year ended December 31, 2014 and related accounting for prior periods.
−Removed: The complaints also sought recovery for the costs of an SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and other damages resulting from the necessity of the restatements.
−Removed: The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights.
−Removed: In October 2019, the Company entered into a confidential settlement agreement with Elyse Douglas and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider, closing the Florida action.
−Removed: Additionally, on December 29, 2021, the Company entered into a confidential settlement agreement with Jeff Zimmerman, leaving Mark Frissora as the sole remaining defendant in the New Jersey action.
−Removed: Fact and expert discovery have been completed and competing dispositive motions were fully briefed as of October 26, 2022.
−Removed: Pursuant to the agreements governing the separation of Herc Holdings Inc.
−Removed: from Hertz Global that occurred on June 30, 2016, Herc Holdings Inc.
−Removed: is entitled to 15 % of the net proceeds of any repayment or recovery from these cases.
Indemnification Obligations
14 unchanged sentences
Note 15— Related Party Transactions
−Removed: Transactions and Agreements between Hertz Holdings and Hertz
−Removed: In June 2019, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $ 425 million with an expiration in June 2020 (the "2019 Master Loan").
−Removed: As a result of the Chapter 11 Cases, the full amount outstanding under the 2019 Master Loan was deemed uncollectible, resulting in a charge of $ 133 million during the second quarter of 2020.
−Removed: Additionally, the loan due to an affiliate, which represented a tax-related liability from Hertz
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: to Hertz Holdings, in the amount of $ 65 million was subsequently settled via a non-cash distribution from Hertz to Hertz Holdings in 2021.
Other Relationships
4 unchanged sentences
The Company's Audit Committee oversees compliance through our Standards of Business Conduct, reviews conflicts of interest involving directors and determines whether to approve each transaction that involves the Company or any of its affiliates, on one hand, and (directly or indirectly) a director or member of his or her family or any entity managed by any such person, on the other hand.
−Removed: 767 Auto Leasing LLC
−Removed: In January 2018, Hertz entered into the 767 Lease Agreement pursuant to which Hertz granted 767, an entity affiliated with a related party until May 2020, the option to acquire certain vehicles from Hertz.
−Removed: The 767 Lease Agreement was terminated effective October 31, 2021 as disclosed in Note 3, "Divestitures."
−Removed: Note 17— Equity – Hertz Global
−Removed: Emergence from Bankruptcy
−Removed: In connection with the emergence from Chapter 11, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled.
−Removed: As of the Effective Date, there were 1,000,000,000 shares of reorganized Hertz Global common stock and 100,000,000 shares of reorganized Hertz Global preferred stock authorized for issuance.
−Removed: As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding.
−Removed: As of December 31, 2021, all 1,500,000 shares of preferred stock were repurchased and retired.
−Removed: Under reorganized Hertz Global's revised articles of incorporation, 1,000,000,000 shares of reorganized Hertz Global common stock, par value $ 0.01 per share, have been authorized for issuance.
−Removed: Each share represents one vote on matters presented to the voting stockholders of reorganized Hertz Global.
−Removed: The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying consolidated balance sheets of Hertz Global as of December 31, 2022 and 2021.
−Removed: The reorganized Hertz Global common stock is not convertible and does not accrue dividends.
−Removed: Dividends, if any, are paid only upon a valid declaration by the Board of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to any issued and outstanding preferred stock, and applicable debt covenants.
−Removed: 2021 Rights Offering
−Removed: In accordance with the Plan of Reorganization, approximately 35 % of reorganized Hertz Global common stock was offered pursuant to the 2021 Rights Offering for an aggregate purchase price of $ 1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $ 10.00 per share.
−Removed: The final expiration date for the 2021 Rights Offering occurred on June 15, 2021.
−Removed: Hertz Global closed the offering upon emergence from the Chapter 11 Cases on the Effective Date with eligible existing Hertz Global stockholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $ 1.3 billion.
−Removed: The unsubscribed portion
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: of the 2021 Rights Offering was backstopped by certain parties (the "Backstop Parties") resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $ 361 million.
−Removed: The Backstop Parties were compensated a backstop fee of $ 164 million in reorganized Hertz Global common stock valued at $ 10.00 per share which is included in the 2021 Rights Offering in the accompanying Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity.
−Removed: During the third quarter of 2021, reorganized Hertz Global issued additional shares pursuant to the rounding provisions of the 2021 Rights Offering for cash proceeds of approximately $ 4 million at a purchase price of $ 10.00 per share.
+Added: Note 16— Equity and Earnings (Loss) Per Common Share – Hertz Global
+Added: Equity of Hertz Global Holdings, Inc.
+Added: As of December 31, 2023 and 2022, there were 100,000,000 shares of preferred stock authorized, par value $ 0.01 per share, and 1,000,000,000 shares of Hertz Global common stock authorized, par value $ 0.01 per share.
Public Warrants
1 unchanged sentence
See Note 17 , " Public Warrants - Hertz Global," for attributes of the Public Warrants, which are classified at fair value as a liability for financial reporting purposes under U.S.
−Removed: Mezzanine Equity - Preferred Stock
−Removed: In accordance with the revised articles of incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $ 0.01 per share, have been authorized for issuance.
−Removed: Series A Preferred Stock
−Removed: In connection with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock on the Effective Date, with an initial stated value of $ 1,000 per share, to Apollo, on behalf of one or more investment funds, separate accounts, and other entities owned, controlled, managed, and/or advised by Apollo or its affiliates, for $ 1.5 billion, less a 2 % upfront discount and stock issuance fees.
−Removed: On December 21, 2021, all shares of the Series A Preferred Stock were repurchased at a price of $ 1,250 per share for aggregate payments by Hertz Global of $ 1.9 billion.
−Removed: Hertz Global funded such share repurchases with available cash, including proceeds from the offering of the Senior Notes Due 2026 and Senior Notes Due 2029 which were contributed to Hertz Global through a dividend distribution from Hertz.
−Removed: The repurchased shares of Series A Preferred Stock were simultaneously retired.
−Removed: The difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees, of $ 450 million was recorded in Hertz Global's additional paid in capital as of December 31, 2021, and accordingly, was subtracted from net income available to common stockholders of Hertz Global for purposes of calculating basic and diluted earnings per share for the year ended December 31, 2021.
−Removed: Nasdaq Listing
−Removed: On November 8, 2021, reorganized Hertz Global successfully completed its Nasdaq listing, in which shares of its new common stock were registered with the SEC for a public offering by certain selling stockholders.
−Removed: On November 9, 2021, reorganized Hertz Global's common stock and Public Warrants began trading on Nasdaq under the trading symbols "HTZ" and "HTZWW," respectively.
−Removed: In conjunction with the registration of Hertz Global's common stock in the Nasdaq listing, certain selling stockholders offered and sold 44,520,000 shares of Hertz Global's common stock to the public.
−Removed: Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate purchase price of $ 300 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2022 and 2021.
Share Repurchase Programs for Common Stock
−Removed: On November 29, 2021, Hertz Global's Board approved the 2021 Share Repurchase Program that authorized the repurchase of up to $ 2.0 billion worth of shares of Hertz Global's outstanding common stock.
−Removed: Between the inception of the 2021 Share Repurchase Program and December 31, 2021, a total of 17,106,026 shares of Hertz Global's
+Added: 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.
+Added: In 2022, the Company completed the
HERTZ GLOBAL HOLDINGS, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: common stock were repurchased by Hertz Global at an average share price of $ 23.83 , resulting in an aggregate purchase price of $ 408 million.
−Removed: 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 and second quarters of 2022 at an average share price of $ 19.74 for an aggregate purchase price of $ 1.6 billion.
+Added: 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.
−Removed: In June 2022, Hertz Global's Board of Directors 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.
−Removed: Between the 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 .
−Removed: 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.
+Added: 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.
+Added: 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.
+Added: As of December 31, 2023, approximately $ 874 million remains available under the 2022 Share Repurchase Program.
+Added: 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.
+Added: 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 share price of $ 15.01 for an aggregate purchase price of $ 291 million.
+Added: 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.
+Added: 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.
Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.
−Removed: Any 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.
−Removed: The share repurchase authorization 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.
+Added: 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 shares of any repurchases.
−Removed: Note 18— Earnings (Loss) Per Common Share – Hertz Global
+Added: Earnings (Loss) Per Common Share
Basic earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding.
−Removed: Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, except when the effect would be anti-dilutive.
+Added: Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, computed using the treasury stock method, except when the effect would be anti-dilutive.
For the years ended December 31, 2023 and 2022, the diluted weighted-average shares outstanding included the dilutive impact of Public Warrants where the Company assumed share settlement of the Public Warrants as of the beginning of the reporting period.
Additionally, the Company removes the change in fair value of Public Warrants when computing diluted earnings (loss) per common share, when the impact of Public Warrants is dilutive.
−Removed: As disclosed in Note 17, "Equity – Hertz Global," in December 2021 all shares of the Series A Preferred Stock were repurchased by Hertz Global.
−Removed: The difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global was deemed a dividend to the holders of Hertz Global's Series A Preferred Stock, along with certain fees for purposes of computing basic and diluted earnings per share below.
+Added: In connection with the repurchase of the Series A Preferred Stock by Hertz Global, the difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global was deemed a dividend to the holders of the Series A Preferred Stock.
As dividends represent earnings that were not available to the holders of Hertz Global's common stock when computing basic and diluted earnings (loss) per common share, they are reflected as an adjustment to net income (loss) available to common stockholders when computing basic and diluted earnings (loss) per common share for Hertz Global for the year ended December 31, 2021.
6 unchanged sentences
(In millions, except per share data) (1)
+Added: 2023 2022 2021
Net income (loss) attributable to Hertz Global $ 616 $ 2,059 $ 366
4 unchanged sentences
Basic weighted-average common shares outstanding 313 379 315
−Removed: Dilutive effect of stock options, RSUs and PUs 1 — —
+Added: Dilutive effect of stock options, RSUs and PSUs 1 1 —
Dilutive effect of Public Warrants 11 23 —
6 unchanged sentences
Diluted $ 1.39 $ 3.36 $ ( 0.27 )
−Removed: (1) Reflects the difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees.
−Removed: (2) Under the Plan of Reorganization approved by the Bankruptcy Court, the 2021 Rights Offering subscription was made available to eligible existing stockholders on a pro rata basis to their existing common stock interests;
−Removed: therefore diluted earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date for the 2021 Rights Offering.
+Added: (1) The table above is denoted in millions, excluding earnings (loss) per common share.
+Added: Amounts are calculated from the underlying numbers in thousands, and as a result, may not agree to the amounts shown in the table when calculated in millions.
+Added: (2) Reflects the difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global, including certain fees.
Note 17— Public Warrants - Hertz Global
−Removed: On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $ 13.80 per Public Warrant, subject to certain conditions.
−Removed: The Public Warrants allow the holders to purchase up to 18 % of the aggregate number of reorganized Hertz Global common interests issued and outstanding as of the Effective Date.
−Removed: Each Public Warrant will entitle the holders to receive one share of reorganized Hertz Global common stock.
+Added: The Company accounts for its Public Warrants in accordance with the provisions of Topic 480, under which the Public Warrants meet the definition of a freestanding financial instrument.
+Added: Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions that are only applicable in the event of change of control (as defined by the Public Warrant Agreement).
+Added: The Public Warrants are recorded at fair value in the accompanying consolidated balance sheets as of December 31, 2023 and 2022.
+Added: See Note 12, "Fair Value Measurements."
+Added: The Public Warrants entitle the holders to receive one share of reorganized Hertz Global common stock upon exercise.
The Public Warrants have a 30-year term and are exercisable from the date of issuance until June 30, 2051, at which time any unexercised Public Warrants will expire, and the rights of the holders to purchase reorganized Hertz Global common stock will terminate.
1 unchanged sentence
As of December 31, 2023, the exercise price remains $ 13.80 .
−Removed: 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.
−Removed: 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.
−Removed: The Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock.
−Removed: On November 9, 2021, the
+Added: 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.
+Added: As of December 31, 2023, 82,737,554 Public Warrants remain outstanding.
HERTZ GLOBAL HOLDINGS, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Public Warrants began trading on Nasdaq under the trading symbol "HTZWW." The Public Warrants previously traded on the over-the-counter market.
−Removed: The Company accounts for the Public Warrants in accordance with the provisions of Topic 480, under which the Public Warrants meet the definition of a freestanding financial instrument.
−Removed: Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions that are only applicable in the event of change of control (as defined by the Public Warrant Agreement).
−Removed: The Public Warrants are recorded at fair value in the accompanying consolidated balance sheets as of December 31, 2022 and 2021.
−Removed: See Note 13, "Fair Value Measurements."
Note 18— Segment Information
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Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables provide significant statement of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.
8 unchanged sentences
Americas RAC (2)
+Added: $ 1,775 $ 553 $ 343
International RAC 264 148 154
−Removed: Total reportable segments 701 497 1,595
−Removed: All other operations (1)
Total Hertz Global and Hertz $ 2,039 $ 701 $ 497
5 unchanged sentences
Total Hertz Global and Hertz $ 149 $ 142 $ 196
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Years Ended December 31,
+Added: (In millions) 2023 2022 2021
Interest expense, net
3 unchanged sentences
All other operations (1)
−Removed: Total Hertz Global 328 469 608
−Removed: Hertz interest income from loan to Hertz Global — — ( 2 )
−Removed: Total - Hertz
−Removed: $ 328 $ 469 $ 606
+Added: Total Hertz Global and Hertz $ 793 $ 328 $ 469
Adjusted EBITDA
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Total Hertz Global and Hertz $ 561 $ 2,305 $ 2,130
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31,
2 unchanged sentences
Americas RAC (3)
+Added: $ 12,450 $ 10,813
International RAC 2,201 1,682
−Removed: Total reportable segments 12,495 9,226
Total Hertz Global and Hertz $ 14,651 $ 12,495
13 unchanged sentences
(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021.
−Removed: (2) The consolidated total assets of Hertz Global and Hertz as of December 31, 2022 and 2021 included total assets of VIEs of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
−Removed: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.
+Added: (2) For the year ended December 31, 2023, includes the write-down to carrying value of vehicles classified as held for sale, including the EV Disposal Group.
+Added: See Note 4, "Revenue Earning Vehicles."
+Added: (3) Includes the carrying amount of vehicles classified as held for sale as of the respective balance sheet date, including the EV Disposal Group in 2023.
+Added: See Note 4, "Revenue Earning Vehicles."
+Added: (4) The consolidated total assets of Hertz Global and Hertz as of December 31, 2023 and 2022 include total assets of VIEs of $ 1.7 billion and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.
+Added: See "Pledges Related to Vehicle Financing" in Note 6, "Debt," for further information.
HERTZ GLOBAL HOLDINGS, INC.
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$ ( 40 ) $ ( 14 ) $ ( 11 )
+Added: (1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021.
The Company operates in the U.S.
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Total Hertz $ 24,604 $ 22,496
+Added: (1) Includes the carrying amount of vehicles classified as held for sale as of the respective balance sheet date, including the EV Disposal Group in 2023.
+Added: See Note 4, "Revenue Earning Vehicles."
Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:
16 unchanged sentences
( 17 ) ( 45 ) ( 76 )
−Removed: Technology-related intangible and other asset impairments (6)
Reorganization items, net (6)
−Removed: — ( 677 ) ( 175 )
Pre-reorganization charges and non-debtor financing charges (7)
−Removed: — ( 42 ) ( 109 )
Gain from the Donlen Sale (8)
2 unchanged sentences
Unrealized gains (losses) on financial instruments (10)
+Added: ( 117 ) 111 4
+Added: Gain on sale of non-vehicle capital assets (11)
Litigation settlements (12)
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( 17 ) ( 45 ) ( 76 )
−Removed: Technology-related intangible and other asset impairments (6)
Reorganization items, net (6)
−Removed: — ( 513 ) ( 175 )
Pre-reorganization charges and non-debtor financing charges (7)
−Removed: — ( 42 ) ( 109 )
Gain from the Donlen Sale (8)
Unrealized gains (losses) on financial instruments (10)
+Added: ( 117 ) 111 4
+Added: Gain on sale of non-vehicle capital assets (11)
Litigation settlements (12)
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( 37 ) ( 112 ) 24
−Removed: Write-off of intercompany loan (14)
Income (loss) before income taxes $ 123 $ 1,745 $ 1,474
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(5) Represents charges incurred under restructuring actions as defined in U.S.
−Removed: See Note 10, "Restructuring," for further information.
Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.
−Removed: (6) For 2020, represents a $ 193 million impairment of technology-related intangible assets and capitalized cloud computing implementations costs and a $ 20 million impairment of the Hertz tradename, as disclosed in Note 5, "Goodwill and Intangible Assets, Net."
(6) Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 19, "Reorganization Items, Net."
5 unchanged sentences
See Note 11, "Financial Instruments."
+Added: (11) Represents gain on sale of certain non-vehicle capital assets sold in March 2023.
+Added: See Note 3, "Divestitures."
(12) Represents payments made for the settlement of certain claims related to alleged false arrests.
1 unchanged sentence
(13) Represents miscellaneous items.
+Added: 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.
−Removed: 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 the Company's 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.
HERTZ GLOBAL HOLDINGS, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (14) For 2020, represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 16, "Related Party Transactions."
Note 19— Reorganization Items, Net
−Removed: The Debtors incurred incremental costs as a result of the Chapter 11 Cases and settlement of liabilities under the Plan of Reorganization which were recorded as reorganization items, net in the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020.
+Added: The Debtors incurred incremental costs as a result of the Chapter 11 Cases and settlement of liabilities under the Plan of Reorganization which were recorded as reorganization items, net in the accompanying consolidated statements of operations for the year ended December 31, 2021.
The following tables summarize reorganization items, net:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(In millions) 2021
8 unchanged sentences
Reorganization items, net $ 677
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(In millions) 2021
10 unchanged sentences
See Note 6, "Debt," for further information.
−Removed: (2) Breakup fee paid to prior plan sponsors and certain of their respective affiliates and holders of certain notes upon emergence from Chapter 11 in accordance with an equity purchase and commitment agreement entered into on April 3, 2021, which was subsequently terminated.
−Removed: (3) See Note 8, "Stock-Based Compensation," for further details.
+Added: (2) Breakup fee paid to prior plan sponsors and certain of their respective affiliates and holders of certain notes upon emergence from Chapter 11 in accordance with an equity purchase and commitment agreement entered into in April 2021, which was subsequently terminated.
Cash payments during the year ended December 31, 2021 totaled $ 485 million.
3 unchanged sentences
PARENT COMPANY BALANCE SHEETS
−Removed: (In millions, except par value)
+Added: (In millions, except par value and share data)
Cash and cash equivalents $ — $ —
8 unchanged sentences
Accrued liabilities $ — $ 21
+Added: Accrued taxes, net 2
Public Warrants 453 617
19 unchanged sentences
2023 2022 2021
−Removed: Total Revenues $ — $ — $ —
−Removed: Interest expense, net
−Removed: Write-off of intercompany loan — — ( 133 )
+Added: Revenues $ — $ — $ —
Reorganization items, net — — 164
5 unchanged sentences
Equity in earnings (losses) of subsidiaries, net of tax 452 1,355 1,157
−Removed: 1,355 1,157 ( 1,846 )
Net income (loss) 616 2,059 366
2 unchanged sentences
The accompanying notes are an integral part of these financial statements.
−Removed: SCHEDULE I (Continued)
−Removed: CONDENSED FINANCIAL INFORMATION OF REGISTRANT
−Removed: HERTZ GLOBAL HOLDINGS, INC.
PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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The accompanying notes are an integral part of these financial statements.
+Added: SCHEDULE I (Continued)
+Added: CONDENSED FINANCIAL INFORMATION OF REGISTRANT
+Added: HERTZ GLOBAL HOLDINGS, INC.
PARENT COMPANY STATEMENTS OF CASH FLOWS
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Cash flows from financing activities:
−Removed: Proceeds from loans with Hertz — — 5
Proceeds from Plan Sponsors — — 2,781
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Dividends from Hertz 321 2,477 2,470
−Removed: Proceeds from issuance of stock, net — — 28
Other ( 9 ) ( 20 ) ( 9 )
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was incorporated in Delaware in 2015 and wholly owns Rental Car Intermediate Holdings, LLC which wholly owns Hertz, Hertz Global's primary operating company.
−Removed: On May 22, 2020, Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S.
−Removed: and Canada filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S.
−Removed: Bankruptcy Court for the District of Delaware.
−Removed: On June 30, 2021, these entities emerged from bankruptcy.
These condensed parent company financial statements reflect the activity of Hertz Holdings as the parent company to Hertz and have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Hertz exceed 25% of the consolidated net assets of Hertz Holdings.
This information should be read in conjunction with the consolidated financial statements of Hertz Global included in this 2023 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
−Removed: Note 2— Contingencies
−Removed: For a discussion of the commitments and contingencies of Hertz Holdings, refer to the section below included in Note 15, "Contingencies and Off-Balance Sheet Commitments," to the Notes to its consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
−Removed: • Litigation Against Former Executives
−Removed: The remaining sections of Note 15, "Contingencies and Off-Balance Sheet Commitments," and Note 9, "Leases," to the Notes to its consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data," describe the commitments and contingencies of Hertz Holdings, including its subsidiaries.
Note 2— Dividends
−Removed: In 2022, $ 2.5 billion in cash dividends were paid to Hertz Holdings to fund common stock repurchases and in 2021, $ 2.5 billion in cash dividends were paid by Hertz to Hertz Holdings to fund preferred stock and common stock share 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." Additionally, in December 2021, a $ 65 million tax-related liability for a loan due from Hertz to Hertz Holdings was settled via a non-cash distribution as further disclosed in Note 16, "Related Party Transactions," to the Notes to its consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." There were no non-cash dividends paid by Hertz in 2022, 2021 or 2020.
+Added: In 2023 and 2022, $ 321 million and $ 2.5 billion in cash dividends were paid by Hertz to Hertz Holdings to fund common stock repurchases, respectively.
+Added: In 2021, $ 2.5 billion in cash dividends were paid by Hertz to Hertz Holdings to fund preferred stock and common stock share repurchases.
+Added: Additionally, in December 2021, a $ 65 million tax-related liability for a loan due from Hertz to Hertz Holdings was settled via a non-cash distribution.
+Added: There were no non-cash dividends paid by Hertz in 2023, 2022 or 2021.
Note 3— Share Repurchases
−Removed: For a discussion of the share repurchase programs of Hertz Holdings, refer to 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." In 2022 and 2021, Hertz Holdings repurchased 127,980,030 shares and 27,450,854 shares, respectively, for $ 2.4 billion and $ 708 million, respectively.
+Added: For a discussion of the share repurchase programs of Hertz Holdings, refer to Note 16, "Equity and Earnings (Loss) Per Common Share – Hertz Global" to the Notes to its consolidated financial statements in this 2023 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." In 2023 and 2022, Hertz Holdings repurchased 19,381,160 shares and 127,980,030 shares, for $ 291 million and, $ 2.4 billion, respectively.
+Added: There were no share repurchases after December 31, 2023 through the filing of this 2023 Annual Report.
These amounts are included in treasury stock in the accompanying parent-only balance sheets of Hertz Holdings as of December 31, 2023 and 2022.
−Removed: Between January 1, 2023 and January 26, 2023, Hertz Holdings repurchased a total of 1,079,647 shares for $ 18 million.
VALUATION AND QUALIFYING ACCOUNTS
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Year ended December 31, 2021 46 125 — ( 121 ) (1)
−Removed: — ( 83 ) (1)(2)
Tax valuation allowances:
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(1) Amounts written off, net of recoveries.
−Removed: (2) Activity includes allowances associated with Donlen while classified as held for sale prior to completion of the Donlen Sale on March 30, 2021, as disclosed in Note 3, "Divestitures," to the notes to the Company's consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
(2) Activity represents the release of a valuation allowance.
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Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this 2023 Annual Report.
−Removed: Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2022, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
+Added: Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2023, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
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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.