What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-02-18 compared with 2024-02-12 · 298 added, 309 removed, 484 unchanged (56% of the section changed)

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

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

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

Repurchases of Equity Securities

Share Repurchase Programs for Common Stock

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

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

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

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

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

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

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

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

In June 2022, Hertz Global's independent Audit Committee recommended, and its Board approved, a share repurchase program (the "2022 Share Repurchase Program") that authorized repurchases of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock.

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

However, during the effective period of Amendment No.

8, as disclosed in Note 7, "Debt," in Part II, Item 8 of this 2024 Annual Report, the repurchase of Hertz Global common stock is not permitted between April 16, 2024 through April 1, 2025.

There were no share repurchases during the year ended December 31, 2024.

As of December 31, 2024, $874 million remains available under the 2022 Share Repurchase Program.

Subsequent to the expiration of Amendment No.

8, any future share 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 under the Exchange Act), privately negotiated transactions, accelerated share repurchases and other transactions in accordance with applicable securities laws.

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

Performance Graph

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

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

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

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

HERTZ GLOBAL HOLDINGS, INC.

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

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

Total number of shares purchased (b)

Average price paid per share (c)

Total number of shares purchased as part of the publicly announced plan or program (d)

Maximum number (or approximate dollar value) of shares that may yet be purchased under the publicly announced plan or program

(In thousands, except share data)

October 1 – October 31, 2023 1,649,589 $ 10.50 1,649,589 $ 897,958

November 1 – November 30, 2023 2,367,562 $ 8.64 2,367,562 $ 877,500

December 1 – December 31, 2023 339,369 $ 9.00 339,369 $ 874,445

Total 4,356,520 $ 9.37 4,356,520 $ 874,445

Performance Graph

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

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

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

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

to a registration statement on Form S-1), at the market close, through December 31, 2024.

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

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

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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

In 2024, Hertz paid dividends to Hertz Holdings of $7 million for certain general purposes.

Hertz paid dividends to Hertz Holdings of $321 million and $2,477 million in 2023 and 2022, respectively, to help fund common stock repurchases, as further disclosed in Note 17, "Equity and Earnings (Loss) Per Common Share – Hertz Global" in Part II, Item 8 of this 2024 Annual Report.

Not applicable.

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Differences between the operations and results of Hertz and Hertz Global are separately disclosed and explained.

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AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

We sometimes use the words “we,” “our,” “us” and the “Company” in this MD&A for disclosures that relate to all of Hertz and Hertz Global.

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

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

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

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GAAP measure, in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

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AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT

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Our business requires significant expenditures for vehicles, and, as such, we require substantial liquidity to finance such expenditures.

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

Our strategy is focused on excellence in execution of the basics.

We are committed to delivering unmatched customer experiences, optimizing fleet economics and building on our leadership in ride share.

Continuing to build on our brand strength, global network and global fleet management capabilities, while also combining those efforts with investments in technology, shared mobility and a digital-first customer experience, will allow us to deliver on the basics and remain a central player in the modern mobility ecosystem.

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

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facility, self-insurance and reservation costs;

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

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

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

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

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

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

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

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

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

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

Our Reportable Segments

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

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

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

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When a revenue earning vehicle is acquired outside of a vehicle repurchase program, which is the case for the majority of our fleet at December 31, 2024, we estimate the period that we will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).

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

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

We also estimate the residual value of the applicable revenue earning vehicles at the expected time of disposal, considering factors such as make, model and options, age, physical condition, mileage, sale location, time of the year, channel disposition (e.g., auction, retail, dealer direct), historical sales experience for similar vehicles, third-party expectations of resale value and market conditions.

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

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

Chapter 11 and Emergence

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

Bankruptcy Code in the Bankruptcy Court.

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

2023 Operating Overview

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

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

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

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

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

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

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

2024 Operating Overview

As of December 31, 2024, the sale of the EV Disposal Groups was substantially complete.

During the year ended December 31, 2024, we incurred incremental depreciation charges, primarily in the first half of 2024, of $175 million for the write-down on the vehicles in the EV Disposal Groups, of which $164 million and $11 million are associated with our Americas RAC and International RAC segments, respectively, and $48 million for losses incurred on the vehicles sold, primarily in our Americas RAC segment.

See Note 5, "Revenue Earning Vehicles" in Part II, Item 8 of this 2024 Annual Report for further details, including the definition of "EV Disposal Groups.".

The following charts provide the period-over-period change for several key factors influencing our results for each of the years ended December 31, 2024 and 2023:

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

(2) Results shown are in constant currency as of December 31, 2023.

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

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THE HERTZ CORPORATION AND SUBSIDIARIES

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

For more information on the above, see the discussion of our results on a consolidated basis and by segment that follows herein.

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Discussions of our results of operations, liquidity and capital resources for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Part II, Item 7 of our 2023 Form 10-K, which is available on the SEC's website (www.sec.gov) or indirectly through our website (www.hertz.com).

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

CONSOLIDATED RESULTS OF OPERATIONS - HERTZ

Years Ended December 31, Percent Increase/(Decrease)

($ In millions) 2023 2022 2021 2023 vs.

2022 2022 vs.

Years Ended December 31, Percent

Increase/(Decrease)

($ In millions) 2024 2023

Total revenues $ 9,049 $ 9,371 (3)%

Depreciation of revenue earning vehicles and lease charges, net 3,611 2,039 77

Direct vehicle and operating expenses 5,689 5,455 4

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

Non-vehicle depreciation and amortization 139 149 (6)

Selling, general and administrative expenses

962 959 688 — 39

Interest expense, net:

555 159 284 NM (44)

238 169 185 41 (9)

Interest expense, net 793 328 469 NM (30)

Interest expense, net 959 793 21

Other (income) expense, net

12 2 (21) NM NM

Reorganization items, net — — 513 — (100)

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

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

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

(Gain) from the sale of non-vehicle capital assets — (162) (100)

Bankruptcy-related litigation reserve

Long-Lived Assets impairment

Income (loss) before income taxes (3,512) 123 NM

Income tax (provision) benefit

329 (390) (318) NM 23

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

Net (income) loss attributable to noncontrolling interests

— — 1 — (100)

Net income (loss) attributable to Hertz

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

Net income (loss) $ (3,137) $ 452 NM

Adjusted Corporate EBITDA (a)

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

$ (1,541) $ 561 NM

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

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Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

Total revenues decreased $322 million in 2024 compared to 2023, of which $324 million is attributable to our Americas RAC segment, resulting primarily from lower pricing.

Depreciation of revenue earning vehicles and lease charges, net increased $1.6 billion in 2024 compared to 2023, of which $1.4 billion is attributable to our Americas RAC segment.

Depreciation of revenue earning vehicles and lease charges, net increased due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) decreased holding periods resulting from the acceleration of our rental fleet rotation and (iii) per unit losses recognized on vehicle dispositions during 2024 compared to per unit gains recognized in 2023.

DOE increased $234 million in 2024 compared to 2023 with increases of $144 million and $91 million in our Americas RAC and International RAC segments, respectively.

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

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

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

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

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

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

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

The increase in DOE was due primarily to increased self-insurance liabilities as a result of adverse experience and case development, increased vehicle in-fleeting costs and a loss recovery in the second quarter of 2023 with no comparable loss recovery in 2024.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SG&A decreased $143 million in 2024 compared to 2023 driven primarily by decreases of $141 million and $19 million associated with our corporate operations and Americas RAC segment, respectively, partially offset by an increase of $16 million in our International RAC segment.

The decrease in SG&A associated with our corporate operations was due primarily to a non-cash stock-based compensation gain related to forfeitures of former chief executive officer ("CEO") awards in March 2024, decreased third-party spend and reduced non-cash stock-based compensation charges, partially offset by intercompany royalty assessment fees received from our International RAC segment and increased restructuring related costs.

SG&A in our Americas RAC segment decreased due primarily to reduced advertising spend, partially offset by increased restructuring related costs and increased personnel costs.

SG&A in our International RAC segment increased due primarily to increased restructuring related costs and higher personnel costs, partially offset by lower intercompany royalty assessment fees paid to our corporate operations.

Vehicle interest expense, net increased $35 million in 2024 compared to 2023 due primarily to higher interest rates and increased debt levels.

Non-vehicle interest expense, net increased $131 million in 2024 compared to 2023 due primarily to higher debt levels and higher interest rates.

In 2023, we recognized a gain of $162 million on the sale of certain non-vehicle capital assets in our Americas RAC segment, as disclosed in Note 4, "Divestitures," in Part II, Item 8 of this 2024 Annual Report.

In 2024, we recognized expense of $292 million in our corporate operations related to an increase to an existing bankruptcy-related litigation reserve, including related interest that continues to accrue during each subsequent reporting period, as disclosed in Note 15, "Contingencies and Off-Balance Sheet Commitments," in Part II, Item 8 of this 2024 Annual Report.

In 2024, we recognized an impairment charge of $1.0 billion associated with certain long-lived assets in our Americas RAC and International RAC segments.

See Note 3, "Long-Lived Assets Impairment," in Part II, Item 8 of this 2024 Annual Report for further details.

For the year ended December 31, 2024, we recorded a tax benefit of $375 million, which resulted in an effective tax rate of 11%.

For the year ended December 31, 2023, we recorded a tax benefit of $329 million, which resulted in an effective tax rate of (268)%.

The change in tax in 2024 compared to 2023 is driven by lower pretax income, increases in valuation allowances in 2024 and lower EV credits generated in 2024.

CONSOLIDATED RESULTS OF OPERATIONS - HERTZ GLOBAL

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Hertz Global had income of $275 million and $163 million from the change in fair value of Public Warrants that was incremental to Hertz for the years ended December 31, 2024 and 2023, respectively.

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

As of December 31, 2024, our Americas RAC operations had a total of approximately 5,000 company-operated and franchisee locations, comprised of 2,000 airport and 3,000 off airport locations.

HERTZ GLOBAL HOLDINGS, INC.

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

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

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

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

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($ In millions, except as noted) 2024 2023 2024 vs.

2022 2022 vs.

Total revenues $ 7,398 $ 7,722 (4)%

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

Depreciation of revenue earning vehicles and lease charges, net $ 3,198 $ 1,775 80

Direct vehicle and operating expenses $ 4,726 $ 4,582 3

Direct vehicle and operating expenses as a percentage of total revenues

59 % 56 % 53 %

Non-vehicle depreciation and amortization $ 109 $ 125 (13)

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Vehicle interest expense

$ 456 $ 140 $ 213 NM (34)

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

Adjusted EBITDA

$ 479 $ 456 5

Long-Lived Assets impairment

Adjusted EBITDA

$ (1,357) $ 585 NM

Transaction Days (in thousands) (b)

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Vehicle Utilization (c)

81 % 79 % 79 %

Total RPD (in dollars) (d)

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

$ 332 $ 112 $ 81 NM 39

Percentage of program vehicles as of period end

$ 588 $ 332 77

Percentage of program vehicles as of period end

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

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Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

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

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

Total RPD declined from previously elevated post-COVID levels.

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

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

Total Americas RAC revenues decreased $324 million in 2024 compared to 2023 due primarily to lower pricing.

Total RPD declined due primarily to lower rates in most customer channels.

Transaction Days was generally consistent with 2023.

Airport revenues comprised 69% and 68% of total revenues for the segment in 2024 and 2023, respectively.

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $1.4 billion in 2024 compared to 2023 due primarily to (i) deterioration in residual values at the expected time of disposal, (ii) decreased holding periods resulting in part from the acceleration of our rental fleet rotation and (iii) per unit losses recognized on vehicle dispositions in 2024 compared to per unit gains recognized in 2023.

DOE for Americas RAC increased $144 million in 2024 compared to 2023 due primarily to increased self-insurance liabilities as a result of adverse experience and case development, a loss recovery in the second quarter of 2023 with no comparable loss recovery in 2024 and increased vehicle in-fleeting costs related to our accelerated fleet rotation in 2024, partially offset by lower personnel costs.

SG&A for Americas RAC decreased $19 million in 2024 compared to 2023 due primarily to reduced advertising spend, partially offset by increased restructuring related costs and increased personnel costs.

Vehicle interest expense for Americas RAC increased $23 million in 2024 compared to 2023 due primarily to higher average interest rates resulting primarily from the issuances of new HVF III Series Notes in 2024 and higher

HERTZ GLOBAL HOLDINGS, INC.

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

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

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

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

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

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

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

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

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

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

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

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

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

benchmark rates on the HVF III 2021-A Notes, partially offset by interest rate mix and lower debt levels.

Vehicle interest expense in our Americas RAC segment was also impacted by the unwind of certain of its interest rate caps in the first quarter of 2023 resulting in the realization of $88 million of previously unrealized gains, partially offset by a $98 million realized gain for which there was no comparable transaction in 2024.

Americas RAC recognized an impairment charge of $865 million in 2024 associated with certain long-lived assets, of which $740 million and $125 million related to its revenue earning vehicles and ROU assets, respectively.

See Note 3, "Long-Lived Assets Impairment," in Part II, Item 8 of this 2024 Annual Report for further details.

International RAC

As of December 31, 2024, our International RAC operations had approximately 6,200 company-operated and franchisee locations, comprised of 1,500 airport and 4,700 off airport locations in approximately 110 countries and jurisdictions, including Africa, Asia, Australia, Europe, the Middle East and New Zealand.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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($ In millions, except as noted) 2024 2023 2024 vs.

2022 2022 vs.

Total revenues $ 1,651 $ 1,649 —%

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Direct vehicle and operating expenses as a percentage of total revenues

53 % 52 % 61 %

Non-vehicle depreciation and amortization $ 13 $ 11 18

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Selling, general and administrative expenses as a percentage of total revenues

14 % 13 % 14 %

Vehicle interest expense

$ 99 $ 19 $ 59 NM (69)

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

$ 111 $ 99 12

Long-Lived Assets impairment

Adjusted EBITDA

$ 302 $ 350 $ 90 (14) NM

$ 31 $ 302 (90)

Transaction Days (in thousands) (b)

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Vehicle Utilization (c)

76 % 73 % 74 %

Total RPD (in dollars) (d)

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Percentage of program vehicles as of period end

18 % 29 % 32 %

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

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Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

Total RPD in 2023 was consistent with 2022.

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

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

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

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

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

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

Total revenues for International RAC in 2024 were comparable to 2023.

Transaction Days and Total RPD were each relatively flat in 2024 compared to 2023.

HERTZ GLOBAL HOLDINGS, INC.

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

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

Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $150 million in 2024 compared to 2023 due primarily to (i) per unit losses recognized on vehicle dispositions in 2024 compared to per unit gains recognized in 2023, (ii) deterioration in the residual values at the expected time of disposal and (iii) decreased holding periods resulting in part from the acceleration of our rental fleet rotation.

DOE for International RAC increased $91 million in 2024 compared to 2023 due primarily to higher personnel costs, increased self-insurance liabilities as a result of adverse experience and case development, increased collision and damage costs and increased vehicle in-fleeting costs.

SG&A for International RAC increased $16 million in 2024 compared to 2023 due primarily to increased restructuring related costs and higher personnel costs, partially offset by lower intercompany royalty assessment fees paid to our corporate operations.

Vehicle interest expense for International RAC increased $12 million in 2024 compared to 2023 due primarily to higher debt levels and higher market interest rates.

International RAC recognized an impairment charge of $183 million in 2024 associated with its revenue earning vehicles.

See Note 3, "Long-Lived Assets Impairment," in Part II, Item 8 of this 2024 Annual Report for further details.

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

(a) Adjusted Corporate EBITDA is calculated as net income (loss) attributable to Hertz or Hertz Global, adjusted for income taxes;

(a) Adjusted Corporate EBITDA is calculated as net income (loss), adjusted for income taxes;

non-vehicle depreciation and amortization;

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unrealized (gains) losses from financial instruments;

gain on sale of non-vehicle capital assets;

change in fair value of Public Warrants and certain other miscellaneous items.

change in fair value of Public Warrants and certain other miscellaneous or non-recurring items.

When evaluating our operating performance, investors should not consider Adjusted Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance determined in accordance with U.S.

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(In millions) 2024 2023

Net income (loss) attributable to Hertz $ 452 $ 1,355 $ 1,157

Net income (loss) $ (3,137) $ 452

Income tax provision (benefit) (375) (329)

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Restructuring and restructuring related charges (2)

Reorganization items, net (4)

Pre-reorganization and non-debtor financing charges (5)

Gain from the Donlen Sale (6)

Unrealized (gains) losses on financial instruments (3)

117 (111) (4)

Gain on sale of non-vehicle capital assets (4)

Litigation settlements (9)

Non-cash stock-based compensation forfeitures (5)

Bankruptcy-related litigation reserve (6)

Long-Lived Assets impairment (7)

Other items (8)

Adjusted Corporate EBITDA $ (1,541) $ 561

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

Years Ended December 31,

(In millions) 2024 2023

Net income (loss) attributable to Hertz Global $ 616 $ 2,059 $ 366

Net income (loss) $ (2,862) $ 616

Income tax provision (benefit) (375) (330)

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Restructuring and restructuring related charges (2)

Reorganization items, net (4)

Pre-reorganization and non-debtor financing charges (5)

Gain from the Donlen Sale (6)

Unrealized (gains) losses on financial instruments (3)

117 (111) (4)

Gain on sale of non-vehicle capital assets (4)

Litigation settlements (9)

Non-cash stock-based compensation forfeitures (5)

Bankruptcy-related litigation reserve (6)

Long-Lived Assets impairment (7)

Change in fair value of Public Warrants (9)

(163) (704) 627

Other items (8)

Adjusted Corporate EBITDA $ (1,541) $ 561

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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

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GAAP, excluding impairments and asset write-downs.

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

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

(5) Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the reorganization, such as professional fees.

Also included certain non-debtor financing and professional fee charges.

(6) Represents the net gain from the sale of our Donlen business on March 30, 2021 recorded in Corporate as disclosed in Note 3, "Divestitures," in Part II, Item 8 of this 2023 Annual Report.

Also includes restructuring related charges such as incremental costs incurred related to personnel reductions, litigation and closure of underperforming locations.

(3) Represents unrealized (gains) losses on derivative financial instruments.

See Note 12, "Financial Instruments," in Part II, Item 8 of this 2024 Annual Report.

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

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

See Note 4, "Divestitures," in Part II, Item 8 of this 2024 Annual Report.

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

(5) Represents former CEO awards forfeited in March 2024.

See Note 9, "Stock-Based Compensation," in Part II, Item 8 of this 2024 Annual Report.

(6) Represents an increase to an existing bankruptcy-related litigation reserve recorded in September 2024, including interest that continues to accrue during each subsequent reporting period.

See Note 15, "Contingencies and Off-Balance Sheet Commitments," in Part II, Item 8 of this 2024 Annual Report.

(7) Represents impairment charges recognized for certain long-lived assets in the third quarter of 2024.

See Note 3, "Long-Lived Assets Impairment," in Part II, Item 8 of this 2024 Annual Report.

(8) Represents miscellaneous items.

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

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

For 2021, primarily includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by $17 million for certain professional fees, $14 million of charges related to the settlement of bankruptcy claims, charges for a multiemployer pension plan withdrawal liability and letter of credit fees.

For 2024, primarily includes certain IT-related charges, cloud computing costs and certain storm-related vehicle damages, partially offset by a loss recovery settlement and certain litigation settlements.

For 2023, primarily includes certain IT-related charges, 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.

(9) Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants, as disclosed in Note 13, "Fair Value Measurements," in Part II, Item 8 of this 2024 Annual Report.

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

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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

Americas RAC International RAC

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Vehicle Utilization 80 % 81 % 76 % 76 %

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

(d) Total RPD is calculated as revenues with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates ("Total Revenues - adjusted for foreign currency"), divided by the total number of Transaction Days.

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Foreign currency adjustment (1)

(3) (12) (11) (21) 4 (99)

Total Revenues-adjusted for foreign currency $ 7,409 $ 7,728 $ 1,691 $ 1,690

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Total RPU Per Month (in whole dollars) $ 1,449 $ 1,524 $ 1,347 $ 1,352

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

(f) Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges, per vehicle per month and is calculated as depreciation of revenue earning vehicles and lease charges, net, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates, divided by the Average Vehicles in each period, which is determined using a simple average of the number of vehicles at the beginning and end of a period, and then dividing by the number of months in the period reported.

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Depreciation of revenue earning vehicles and lease charges, net (1)

Foreign currency adjustment (1)

$ 3,198 $ 1,775 $ 413 $ 264

Foreign currency adjustment (2)

Adjusted depreciation of revenue earning vehicles and lease charges

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Depreciation Per Unit Per Month (in whole dollars) $ 588 $ 332 $ 331 $ 212

(1) Reflects four months at post-impairment rates for the year ended December 31, 2024.

See Note 3, "Long-Lived Assets Impairment," in Part II, Item 8 of this 2024 Annual Report.

(2) Based on December 31, 2023 foreign currency exchange rates for all periods presented.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

Cash Flows - Hertz

As of December 31, 2024 and 2023, Hertz had cash and cash equivalents of $591 million and $764 million, respectively, and restricted cash and cash equivalents of $541 million and $442 million, respectively.

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

The following

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

Years Ended December 31, 2024 vs.

2022 2022 vs.

(In millions) 2023 2022 2021 $ Change $ Change

(In millions) 2024 2023 $ Change

Cash provided by (used in):

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Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

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

In 2024, cash flows from operating activities decreased $245 million period over period due primarily to a $1.1 billion change in net income, as adjusted for non-cash and non-operating items, inclusive of a $1.0 billion Long-Lived Assets impairment recognized in the third quarter of 2024, partially offset by an $856 million change in working capital accounts.

Cash flows from working capital accounts increased due primarily to an increase to an existing bankruptcy-related litigation reserve recorded in the third quarter of 2024, an increase in self-insurance liabilities as a result of adverse experience and case development, a decrease in non-vehicle receivables due to timing, an increase in accrued interest resulting from our First Lien Senior Notes and Exchangeable Notes issued in June 2024, and lower value added tax receivables.

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

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

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

We expect that in 2024, cash

During 2024, there was a $1.1 billion decrease in the cash used in investing activities period over period due primarily to a $1.2 billion decrease in revenue earning vehicle expenditures, net, partially offset by $168 million of net proceeds received in 2023 from the sale of certain non-vehicle capital assets as disclosed in Note 4, "Divestitures," in Part II, Item 8 of this 2024 Annual Report.

The decrease in revenue earning vehicle expenditures, net is resulting primarily from our accelerated fleet rotation initiatives that began in the second half of 2024, which resulted in higher vehicle dispositions of primarily older vehicles, partially offset by increased vehicle acquisitions.

Net financing cash inflows were $655 million in the 2024 compared to $1.3 billion in 2023.

The $661 million decrease in cash inflows is due primarily to a decrease of $2.2 billion in net proceeds from vehicle debt as a result of less issuances in 2024 versus 2023.

Cash flows from financing activities were also impacted by a $1.2 billion increase in net proceeds from non-vehicle debt resulting from issuances of the First Lien Senior Notes and the Exchangeable Notes in 2024, along with outstanding borrowings on the First Lien RCF in 2024.

A reduction in dividends paid to Hertz Holdings of $314 million in 2024, which were primarily used for share repurchases in 2023, further increased cash inflows during 2024.

HERTZ GLOBAL HOLDINGS, INC.

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

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

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

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

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

Cash Flows - Hertz Global

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Years Ended December 31, 2024 vs.

2022 2022 vs.

(In millions) 2023 2022 2021 $ Change $ Change

(In millions) 2024 2023 $ Change

Cash provided by (used in):

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Share Repurchase Programs for Common Stock

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

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

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

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

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

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

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

However, during the effective period of Amendment No.

8, as disclosed in Note 7, "Debt," in Part II, Item 8 of this 2024 Annual Report, the repurchase of Hertz Global's common stock is not permitted between April 16, 2024 through April 1, 2025.

As of December 31, 2024, $874 million remains available under the 2022 Share Repurchase Program.

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, excluding applicable excise tax.

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, excluding applicable excise tax.

There were no share repurchases during the year ended December 31, 2024.

Common shares repurchased are included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2024 and 2023 in Part II, Item 8 of this 2024 Annual Report.

Subsequent to the expiration of Amendment No.

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

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

HERTZ GLOBAL HOLDINGS, INC.

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

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

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

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

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

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

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

Public Warrants

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

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

In connection with the issuance of the Exchangeable Notes in June 2024, as disclosed in Note 7, "Debt," in Part II, Item 8 of this 2024 Annual Report, an anti-dilution provision in the agreement governing the Public Warrants required that the exercise price and warrant number be adjusted.

This resulted in the exercise price of the Public Warrants decreasing from $13.80 to $13.61, effective upon the issuance of the Exchangeable Notes on June 28, 2024.

Effective concurrently with the change in exercise price, the number of shares of Hertz Global common stock to which a holder of a Public Warrant is entitled upon exercise of a Public Warrant increased from one share to 1.0140 shares.

During the year ended December 31, 2024, approximately 12,500 Public Warrants were exercised, of which 8,000 were cashless exercises, 1,300 were exercised for $13.61 per share and 3,200 were exercised for $13.80 per share.

As of December 31, 2023, approximately 49,000 Public Warrants were exercised, of which 31,000 were cashless exercises and 18,000 were exercised for $13.80 per share.

As of December 31, 2024, approximately 6,300,000 Public Warrants have been exercised since their original issuance in June 2021.

The outstanding warrants are exercisable through June 30, 2051.

As of December 31, 2023, the exercise price remains $13.80.

As of December 31, 2024, the exercise price is $13.61.

Debt Financing

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

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

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

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

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

See Note 7, "Debt," in Part II, Item 8 of this 2024 Annual Report for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of December 31, 2024.

Cash paid for interest on vehicle debt during 2024 compared to 2023 was $511 million and $469 million, respectively.

The $42 million increase in cash paid for vehicle debt interest is due primarily to higher debt levels.

Cash paid for interest on non-vehicle debt during 2024 compared to 2023 was $287 million and $252 million, respectively.

The $35 million increase in cash paid for non-vehicle debt interest is due primarily to higher debt levels and higher outstanding borrowings on the First Lien RCF.

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

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

We expect to maintain heightened levels of indebtedness into 2025 as we continue the acceleration of our fleet refresh.

For a discussion of the risks associated with our high leverage, see Item 1A, "Risk Factors" in this 2024 Annual Report.

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

Significant financing activities during the year ended December 31, 2024 for our non-vehicle debt are below.

First Lien Credit Agreement

In April 2024, Amendment No.

8 became effective and required a First Lien Ratio of less than or equal to 5.0x in the second and third quarters of 2024 and 4.75x in the fourth quarter of 2024 and the first quarter of 2025.

HERTZ GLOBAL HOLDINGS, INC.

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

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

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

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

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

8 also contained a minimum liquidity covenant of $400 million for each month ending in the second and third quarters of 2024 and $500 million for each month ending in the fourth quarter of 2024 and the first quarter of 2025.

Liquidity as defined in the First Lien Credit Agreement may be materially different than corporate liquidity presented above.

Amendment No.

8 also adds certain limitations on Restricted Payments and Permitted Investments (each as defined in the First Lien Credit Agreement).

Under the terms of Amendment No.

8, the increased First Lien Ratio, minimum liquidity covenant, and limitations on Restricted Payments and Permitted Investments will sunset on the first day of the second quarter of 2025.

In July 2024, consistent with obligations arising from the issuance of the First Lien Senior Notes and the Exchangeable Notes, as disclosed below, Hertz Holdings entered into a parent guarantee agreement with the administrative agent for the First Lien Credit Agreement.

Prior to the issuance of each of the First Lien Senior Notes and the Exchangeable Notes, Hertz Holdings did not guarantee the obligations under the First Lien Credit Agreement.

First Lien Senior Notes

In June 2024, Hertz issued $750 million in aggregate principal amount of First Lien Senior Notes, which are guaranteed by Hertz Holdings, Rental Car Intermediate Holdings, LLC and each of Hertz’s direct and indirect U.S.

subsidiaries that are guarantors under the First Lien Credit Agreement.

The First Lien Senior Notes bear interest payable semi-annually in arrears on January 15 and July 15 of each year, beginning in January 2025.

The First Lien Senior Notes mature in July 2029.

Proceeds from the issuance of the First Lien Senior Notes were used to pay down a portion of the outstanding borrowings of the First Lien RCF.

In December 2024, Hertz issued an additional $500 million in aggregate principal amount of First Lien Senior Notes.

The additional First Lien Senior Notes are the same class and series as, and otherwise identical to, the First Lien Senior Notes issued in June 2024, as discussed above.

Proceeds from the issuance of the additional First Lien Senior Notes were used to pay certain fees and expenses associated with amendments to the indentures governing the First Lien Senior Notes and the Exchangeable Notes, with the remaining proceeds used to pay down a portion of the outstanding borrowings of the First Lien RCF.

Exchangeable Notes

In June 2024, Hertz issued $250 million in aggregate principal amount of the Exchangeable Notes, which are guaranteed by Hertz Holdings, Rental Car Intermediate Holdings, LLC and each of Hertz’s direct and indirect U.S.

subsidiaries that are guarantors under the First Lien Credit Agreement.

The Exchangeable Notes bear PIK interest payable semi-annually in arrears on July 15 and January 15 of each year, beginning in January 2025.

The Exchangeable Notes mature in July 2029 (the "Maturity Date"), unless repurchased, redeemed or exchanged (the "Exchange Feature"), in accordance with their terms prior to the Maturity Date.

Prior to April 15, 2029, the Exchangeable Notes will be exchangeable only upon satisfaction of certain conditions and during certain periods.

Thereafter, the Exchangeable Notes will be exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the Maturity Date.

The Exchangeable Notes will be exchangeable by holders into shares of Hertz Global common stock, cash or a combination of common stock and cash, at our election, at an initial exchange rate of 150.9388 shares per $1,000 principal amount of Exchangeable Notes, corresponding to an initial exchange price of $6.6252 per share, subject to adjustment upon the occurrence of certain events.

Proceeds from the issuance of the Exchangeable Notes were used to pay down a portion of the outstanding borrowings of the First Lien RCF.

We may redeem the Exchangeable Notes on or after July 20, 2027 and on or prior to the 31st scheduled trading day immediately preceding the Maturity Date, if the last reported sale price per share of Hertz Global common stock has been at least 250% of the exchange price for the Exchangeable Notes for certain specified periods.

We may redeem all (but not part) of the Exchangeable Notes at a cash redemption price equal to the initial principal amount of the Exchangeable Notes to be redeemed plus PIK interest on such Exchangeable Notes for each interest

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

payment date occurring on or prior to the redemption date plus accrued and unpaid PIK interest on such Exchangeable Notes to, but not including, the redemption date.

At the time of issuance, certain investors affiliated with CK Amarillo LP ("CK Amarillo"), which is an affiliate of Hertz Holdings, purchased approximately $44 million of the Exchangeable Notes.

In addition, in December 2024, Hertz paid certain investors affiliated with CK Amarillo approximately $1 million in consent fees in exchange for such investors tendering their consents, in a consent solicitation of holders of the Exchangeable Notes, to amend certain provisions of the indenture governing the Exchangeable Notes.

See Note 16, "Related Party Transactions," in Part II, Item 8 of this 2024 Annual Report for further details.

Upon issuance, we bifurcated the Exchange Feature from the Exchangeable Notes for accounting purposes utilizing applicable guidance.

As a result, we recognized a debt discount of $68 million within non-vehicle debt, representing the initial fair value of the Exchange Feature.

As of December 31, 2024, the fair value of the Exchange Feature was $61 million.

See Note 13, "Fair Value Measurements," in Part II, Item 8 of this 2024 Annual Report for further details.

The net carrying amount of the Exchangeable Notes consists of the following:

(In millions) December 31, 2024

Principal $ 250

Unamortized debt discount and debt issuance costs (1)

Net carrying amount $ 179

(1) The debt discount is amortized to non-vehicle interest expense over the term of the Exchangeable Notes using the effective interest method.

We recognized interest expense associated with the Exchangeable Notes as follows below for the year ended December 31, 2024.

There was no interest expense recognized for the year ending December 31, 2023.

(In millions) 2024

Contractual interest expense $ 10

Amortization of debt discount and debt issuance costs 4

(Gain) loss on fair value of Exchange Feature (1)

(1) Refer also to Note 13, "Fair Value Measurements," in Part II, Item 8 of this 2024 Annual Report.

Letters of Credit

As of December 31, 2024, there were outstanding standby letters of credit totaling $835 million comprised primarily of $574 million issued under the First Lien RCF and $245 million issued under the Term C Loan.

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

As of December 31, 2024, no capacity remained to issue additional letters of credit under the Term C Loan.

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

As of December 31, 2024, none of the issued letters of credit have been drawn upon.

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

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

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

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

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

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

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

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

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

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

HERTZ GLOBAL HOLDINGS, INC.

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

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

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

(In millions) Aggregate Principal Amount

HVF III Series 2022-2 Class D Notes $ 98

HVF III Series 2022-5 Class D Notes 47

HVF III Series 2023-1 Class D Notes 40

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

Repurchase Facilities

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

Hertz Canadian Securitization

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

Significant financing activities during the year ended December 31, 2024 for our vehicle debt were as follows:

Approximately $1.5 billion of the outstanding vehicle debt in our Americas RAC segment is scheduled to mature during the twelve months following the issuance of this 2024 Annual Report.

Vehicle Variable Funding Notes

In April 2024, HVF III amended the HVF III Series 2021-A Notes to extend the maturity of the Class A Notes to April 2026.

In May 2024, HVF III amended the HVF III Series 2021-A Notes to reduce the Tesla concentration limit.

Vehicle Medium Term Notes

In July 2024, HVF III issued the Series 2024-1 Notes (Class A, Class B, Class C and Class D) and Series 2024-2 Notes (Class A, Class B, Class C and Class D) each in aggregate principal amounts of $375 million with maturity dates of January 2028 and January 2030, respectively.

International RAC

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

New Zealand RCF

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

In April 2024, the European ABS was amended to increase the aggregate maximum borrowings from €1.2 billion to €1.3 billion.

In June 2024, the European ABS was amended to (i) incorporate the Belgium fleet within the European ABS financing structure and (ii) make certain other administrative amendments and revisions for the incorporation of the Belgian fleet.

The aggregate maximum borrowings available under the European ABS remain unchanged after giving effect to the aforementioned amendments and revisions.

Australian Securitization

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

In July 2024, the Australian Securitization was amended to extend the maturity date to June 2026.

New Zealand RCF

In September 2024, the New Zealand RCF was amended to extend the maturity date to August 2026.

Financing Facility

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

In July 2024, the U.K.

Financing Facility was amended to increase aggregate maximum borrowings from £135 million to £170 million and to extend the maturity date to May 2025.

HERTZ GLOBAL HOLDINGS, INC.

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

In December 2024, Hertz Fleet Financing UK Limited (“HFF”), a special purpose orphan entity, entered into the U.K.

ABS, which provides for aggregate maximum borrowings of £145 million and matures in December 2026.

ABS is intended to be the primary vehicle financing facility for the Company's vehicle rental fleet in the U.K., in which the lenders under the U.K.

ABS are granted a security interest in the owned rental vehicles used in the Company's vehicle rental operations in the U.K.

and certain contractual rights related to such vehicles.

As of December 31, 2024, the U.K.

ABS has not been funded and no capacity is available.

As of January 31, 2025, the U.K.

ABS has committed capacity of £145 million.

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

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

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

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

The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments.

As of December 31, 2023, we were in compliance with all covenants in the First Lien Credit Agreement.

the First Lien Ratio, which requires a ratio of less than or equal to 3.0x in the first and last quarters of the calendar year and 3.5x in the second and third quarters of the calendar year.

Amendment No.

8 temporarily increases the First Lien Ratio and contains a minimum liquidity covenant for each fiscal quarter beginning in the second quarter of 2024 and sunsets on the first day of the second quarter of 2025, as discussed above.

As of December 31, 2024, we were in compliance with the First Lien Ratio, as temporarily amended.

Additionally, the First Lien Credit Agreement, the First Lien Senior Notes, the Exchangeable Notes, the Senior Notes Due 2026 and the Senior Notes Due 2029 (collectively, the "Corporate Indebtedness") contain customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and/or compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and, where applicable, the granting of security interests for the benefit of the secured parties under the applicable agreements on after-acquired real property, fixtures and future subsidiaries.

The terms of our Corporate Indebtedness contain covenants limiting the ability of Hertz and its restricted subsidiaries to:

incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, Hertz Global capital stock; make certain investments or other restricted payments; sell certain assets; transfer intellectual property to unrestricted subsidiaries; merge, consolidate or sell all or substantially all of its assets; and create restrictions on the ability of Hertz’s restricted subsidiaries to pay dividends or other amounts to Hertz.

As per the terms of the Corporate Indebtedness, these covenants are subject to a number of important and significant limitations, qualifications and exceptions.

As of December 31, 2024, we were in compliance with all covenants under the terms of agreements governing the respective Corporate Indebtedness.

Vehicle Financing Risks

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

Substantially all of our revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings and asset-backed securities programs.

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

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

and international vehicle rental fleets.

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

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

HERTZ GLOBAL HOLDINGS, INC.

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

backed securities programs.

None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC, TCL Funding LP and each of the domestic and international subsidiaries that pledge vehicle and vehicle related assets as part of our securitization programs) will be available to satisfy the claims of non-vehicle secured or unsecured creditors unless the vehicle related secured creditors under the securitization programs are paid in full.

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

and international vehicle rental fleets.

For further information concerning our asset-backed financing programs and our indebtedness, see Note 7, "Debt," in Part II, Item 8 of this 2024 Annual Report.

Capital Expenditures

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2023 (9,514) 5,498 (4,016)

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

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

Cash inflow (cash outflow) Years Ended December 31, 2024 vs.

2022 2022 vs.

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

($ in millions) 2024 2023 $ Change % Change

Americas RAC $ (2,766) $ (3,412) $ 646 (19)

International RAC (80) (604) 524 (87)

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

Total $ (2,846) $ (4,016) $ 1,170 (29)

NM - Not meaningful

Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

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

Revenue earning vehicle expenditures increased $1.0 billion, or 11%, in 2024 compared to 2023, primarily in our Americas RAC segment, resulting from increased vehicle acquisitions resulting in part from our accelerated fleet rotation in 2024.

Proceeds from disposal of revenue earning vehicles increased $2.2 billion, or 40%, in 2024 compared to 2023, primarily in our Americas RAC segment, resulting from increased vehicle disposals in 2024.

Non-Vehicle Capital Asset Expenditures and Disposals

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2023 (188) 181 (7)

2021 (71) 16 (55)

HERTZ GLOBAL HOLDINGS, INC.

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Cash inflow (cash outflow) Years Ended December 31, 2024 vs.

2022 2022 vs.

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

Americas RAC $ 52 $ (114) $ (35) $ 166 NM $ (79) NM

($ in millions) 2024 2023 $ Change % Change

Americas RAC $ (60) $ 52 $ (112) NM

International RAC (13) (19) 6 (32)

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

Corporate (9) (40) 31 NM

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Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

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

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

In 2024, proceeds for non-vehicle capital assets decreased by $158 million compared to 2023, primarily in our Americas RAC segment, resulting from the sale of certain non-vehicle capital assets in 2023 as disclosed in Note 4, "Divestitures," in Part II, Item 8 of this 2024 Annual Report.

In 2024, expenditures for non-vehicle capital assets decreased by $83 million compared to 2023, primarily in our Americas RAC segment and corporate operations, driven in part by reduced location refurbishment spend and a non-recurring capital outlay for certain non-vehicle prepaids in 2023.

CONTRACTUAL AND OTHER OBLIGATIONS

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Purchase obligations include $31 million representing our tax liability for uncertain tax positions and related net accrued interest and penalties.

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

The table excludes pension benefit obligations as disclosed in Note 8, "Employee Retirement Benefits," in Part II, Item 8 of this 2024 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

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Pension obligations give rise to expenses that are dependent on assumptions discussed in Note 8, "Employee Retirement Benefits," in Part II, Item 8 of this 2024 Annual Report.

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

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

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

Our 2024 worldwide net periodic pension expense included in the accompanying consolidated statement of operations for the year ended December 31, 2024 was $9 million compared to $11 million in 2023 resulting in part from decreased interest costs.

The funded status (i.e., the dollar amount by which the projected benefit obligations exceeded the market value of pension plan assets) of the Hertz Retirement Plan, as defined in Note 8, "Employee Retirement Benefits," in Part II, Item 8 of this 2024 Annual Report, increased in December 31, 2024 compared with December 31, 2023 due primarily to actuarial gains resulting from increased discount rates and an increase in plan settlements.

We contributed $9 million to the Hertz Retirement Plan during 2024, and we do not anticipate contributing to the Hertz Retirement Plan during 2025.

For the international plans, we anticipate contributing approximately $3 million during 2025.

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

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, which may result in periodic adjustments to the depreciation rates recognized in the period of change and future periods.

Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and projected future market conditions, their effect on residual values at the expected time of disposal and the estimated holding periods, which may result in periodic adjustments to the depreciation rates recognized in the period of change and future periods.

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

Changes in estimated residual values or holding periods could cause a material change in our estimates of non-program depreciation expense.

Self-insured Liabilities

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

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

Reserve requirements are based

Changes in projected residual values or holding periods could cause a material change in our estimates of non-program depreciation expense.

Long-Lived Assets

Our long-lived assets consist primarily of revenue earning vehicles, ROU assets and property and equipment.

We make estimates about the expected economic lives, projected residual values and the potential for impairment.

We amortize long-lived assets using the straight-line method over the estimated economic lives.

Long-lived assets are

HERTZ GLOBAL HOLDINGS, INC.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity