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Item 5. Market for Registrant’s Common Equity

2022-02-23 compared with 2021-02-26 · 671 added, 337 removed, 338 unchanged (75% of the section changed)

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

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement on Form S-3 declared filed and effective by the SEC in June 2019 (the "Registration Statement"), Hertz Global entered into an open market sale agreement under which it may offer and sell, from time to time, shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $500 million (the "ATM Program").

Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ATM Program for net proceeds of approximately $28 million.

See Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global," to the Notes to our consolidated financial statements included in this 2020 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for further details.

As a result of the filing of the Chapter 11 Cases, on October 29, 2020, the NYSE informed Hertz Global that its common stock was no longer suitable for listing on the NYSE and that the NYSE suspended trading of Hertz Global common stock (NYSE ticker symbol:

HTZ) after the market close on October 29, 2020.

On October 30, 2020, Hertz Global common stock began trading exclusively on the over-the-counter market under the symbol "HTZGQ".

Also on October 30, 2020, the NYSE applied to the SEC pursuant to Form 25 to remove the common stock of Hertz Global from listing and registration on the NYSE at the opening of business on November 10, 2020.

Pursuant to Form 25, Hertz Global common stock was delisted from the NYSE on November 10, 2020.

Upon deregistration of Hertz Global common stock under Section 12(b) of the Exchange Act, Hertz Global common stock remains registered under Section 12(g) of the Exchange Act.

As a result of trading on the over-the-counter market, quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of February 22, 2021, there were 1,219 holders of record of Hertz Holdings common stock.

Hertz Holdings paid no cash dividends on its common stock in 2020 or 2019, and it does not expect to pay dividends on its common stock for the foreseeable future.

Hertz Holdings has a Board-approved share repurchase program that authorizes it to repurchase shares of its common stock through a variety of methods, including in the open market or through privately negotiated transactions, in accordance with applicable securities laws.

It does not obligate Hertz Holdings to make any repurchases at any specific time or situation.

There were no shares repurchased under this program in 2020 or 2019.

As of December 31, 2020, there was $295 million available for use for repurchases under this program.

Since Hertz Holdings does not conduct business itself, it primarily funds dividends on, and repurchases of, its common stock using dividends from Hertz or amounts borrowed under the master loan agreement.

The credit agreements governing Hertz's Senior Facilities, Letter of Credit Facility, Alternative Letter of Credit Facility and DIP Credit Agreement restrict Hertz's ability to make dividends and certain payments, including payments to Hertz Holdings for dividends on Hertz Holdings' common stock or for share repurchases.

There is no established public trading market for the common stock of Hertz.

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

Hertz did not pay dividends to Hertz Holdings in 2020 or 2019.

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

stock and can be discontinued at any time.

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

Between January 1, 2022 and February 17, 2022, a total of 20,589,620 shares of Hertz Global's common stock were repurchased at an average share price of $20.95 resulting in an aggregate purchase price of $431 million.

Tender Offer for Repurchase of Series A Preferred Stock

On November 23, 2021, Hertz Global commenced a tender offer (the "Tender Offer") to repurchase all 1,500,000 outstanding shares of its Series A Preferred Stock at a per-share price of $1,250.

On December 21, 2021, the Tender Offer expired and all 1,500,000 shares of the Series A Preferred Stock were repurchased at $1,250 per share for aggregate payments by Hertz Global of $1.9 billion, including approximately $7 million in certain fees.

Hertz Global funded the share repurchases in the Tender Offer with available cash, including proceeds from Hertz's offering of the Senior Notes Due 2026 and Senior Notes Due 2029 which were contributed to Hertz Global through a dividend distribution from Hertz.

The repurchased shares of Series A Preferred Stock were simultaneously retired.

In connection with the Tender Offer, any unpaid dividends that the Preferred Stockholders were entitled to pursuant to the original Preferred Stock terms were forfeited upon acceptance of the Tender Offer.

The following table provides a breakdown of our equity security repurchases during the fourth quarter of fiscal year 2021.

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, 2021 0 $ — 0 $ 2,000,000

November 1 – November 30, 2021 11,528,793 $ 28.51 1,183,965 $ 1,971,339

December 1 – December 31, 2021 15,922,061 $ 23.80 15,922,061 $ 1,592,384

Total 27,450,854 $ 25.78 17,106,026 $ 1,592,384

Series A Preferred Stock

October 1 – October 31, 2021 0 $ — 0 1,500,000

November 1 – November 30, 2021 0 $ — 0 1,500,000

December 1 – December 31, 2021 1,500,000 $ 1,250.00 1,500,000 0

Total 1,500,000 $ 1,250.00 1,500,000 0

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 issues.

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

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

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

SELECTED FINANCIAL DATA

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

Global's emergence from bankruptcy and the Nasdaq listing), at the market close, through December 31, 2021.

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

COMPARISON OF CUMULATIVE TOTAL RETURN AMONG HERTZ GLOBAL HOLDINGS, INC.,

RUSSELL 1000 INDEX AND MORNINGSTAR RENTAL & LEASING SERVICES

INDUSTRY GROUP

ASSUMES DIVIDEND REINVESTMENT

Issuance of Unregistered Securities

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock and received cash proceeds as further described in Note 1, "Background," and Note 16, "Equity and Mezzanine Equity – Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report.

In addition, on the Effective Date, in accordance with the Plan of Reorganization, we issued 1,500,000 shares of preferred stock.

In December 2021, all outstanding shares of the preferred stock were redeemed.

See Note 16, "Equity and Mezzanine Equity – Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report.

With the exception of shares of Hertz Holdings common stock issued on account of the backstop obligation under the EPCA, the direct investment commitment under the EPCA and the 2021 Rights Offering, the shares of Hertz Holdings common stock and the Warrants issued pursuant to the Plan of Reorganization were issued pursuant to the exemption from the registration requirements of the Securities Act, under Section 1145 of the Bankruptcy Code, which generally exempts from such registration requirements the issuance of certain securities under a plan of reorganization.

Shares of Hertz Holdings common stock and shares of preferred stock issued on account of the backstop obligation under the EPCA, the direct investment commitment under the EPCA and the 2021 Rights Offering were issued under Section 4(a)(2) of the Securities Act.

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)

There is no established public trading market for the common stock of Hertz.

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

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

Following receipt of consent obtained from the lenders of Hertz's First Lien Credit Facilities to permit the retirement of the preferred shares through the Tender Offer as further disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global", Hertz paid dividends to Hertz Holdings of $2.5 billion in 2021 to help fund the Tender Offer and common stock repurchases as further disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global" to the Notes to its consolidated financial statements in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Hertz did not pay dividends in 2020 to Hertz Holdings.

The credit agreements governing Hertz's First Lien Credit Facilities restrict Hertz's ability to make dividends and certain payments to Hertz Holdings.

Not applicable.

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

You should read the following MD&A together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements,” Item 1A, "Risk Factors,” and our consolidated financial statements and related notes included in this 2020 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data.”

You should read the following MD&A together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors,” Item 1A, "Risk Factors,” and our consolidated financial statements and related notes included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data.”

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

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

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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

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

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

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

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

It is used as a component to measure Total RPD and Vehicle Utilization.

Transaction Days represent the total number of 24-hour periods, with any partial period counted

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period.

Transaction Days represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period.

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

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

The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in, and will likely continue to result in, significant disruptions to the global economy, as well as businesses around the world.

The impact of this pandemic has been extensive in many aspects of society, which has resulted in significant disruptions to the global economy, as well as businesses around the world.

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

There is continued uncertainty about the duration of the negative impact from COVID-19 and the length and scope of travel restrictions and business closures imposed by governments of impacted countries and voluntarily undertaken by private businesses.

In response to COVID-19, we began aggressively managing costs and (i) initiated a restructuring program affecting approximately 11,000 employees in our U.S.

RAC segment and U.S.

corporate operations;

(ii) actively negotiated to abate or defer our airport rent and concession payments;

(iii) substantially reduced capital expenditures;

(iv) eliminated discretionary marketing spend;

and (v) reduced our commitments to purchase vehicles by approximately $4.0 billion from original commitments in our U.S.

Although we took aggressive action to eliminate costs, we faced significant ongoing monthly expenses, including monthly payments under our Operating Lease, pursuant to which Hertz leases vehicles which we use in our U.S.

RAC rental car operations.

On April 27, 2020, Hertz did not make certain payments in accordance with the Operating Lease, and as a result, an amortization event was in effect as of May 5, 2020 for all series of notes issued by HVF II and a liquidation event was in effect with respect to the Series 2013-A Notes issued by HVF II.

Refer to Note 1, "Background," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report for additional information on the Forbearance Agreement and Waiver Agreements which expired on May 22, 2020.

Voluntary Petitions for Bankruptcy

In connection with the expiration of the Forbearance Agreement and the Waiver Agreements described above and the continuing economic impact from COVID-19, on the Petition Date, the Debtors filed Petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

The Chapter 11 Cases are being jointly administered by the Bankruptcy Court under the caption In re The Hertz Corporation, et al., Case No.

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

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

There remains continued uncertainty about the duration of the negative impact from COVID-19 and its variants, including the length and scope of travel restrictions and business closures that may be imposed by governments of impacted countries or voluntarily undertaken by individuals and private businesses.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

Chapter 11 and Emergence

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

The Chapter 11 Cases were jointly administered for procedural purposes only under the caption In re The Hertz Corporation, et al., Case No.

20-11218 (MFW) .

While in Chapter 11, in general we were allowed to operate our ongoing business, but could not engage in transactions outside the ordinary course of our business without the prior approval of the Bankruptcy Court.

On May 14, 2021, the Debtors filed the Plan of Reorganization, and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021.

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court.

On June 30, 2021, the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11.

Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk.

The information on this website is not incorporated by reference and does not constitute part of this 2021 Annual Report.

On the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:

• $2.8 billion from the purchase of Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;

• $1.6 billion from the purchase of Hertz Global common stock pursuant to the 2021 Rights Offering;

• $1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo;

• $1.5 billion in proceeds from our secured exit term loan facilities (the "Term Loans").

Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the Plan of Reorganization as follows:

• the holders of administrative, priority and secured claims received payment in cash in full;

• the holders of the approximately $1.0 billion of obligations owed with respect to the DIP Credit Agreement received payment in cash in full;

• the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;

• the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;

• the holders of the €725 million European Vehicle Notes received payment in cash in full;

• the holders of the €257 million Second HIL Credit Agreement received payment in cash in full;

• the holders of claims with respect to the Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums;

• the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate from the Petition Date to the date of payment (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of 3% of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either Public Warrants, for in the aggregate of up to 18% of reorganized Hertz Global common

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

Liquidity Considerations Following the Chapter 11 Filing

Per the terms of the Interim Lease Order entered on July 24, 2020, the Debtors were directed to, among other things, (i) make $650 million of base rent payments under the Operating Lease to the HVF trustee in the amount of six equal monthly payments of approximately $108 million commencing in July 2020 through December 2020;

(ii) dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, inclusive, where the proceeds of the dispositions, subject to certain exclusions set forth in the Interim Lease Order, were to be used to make payments under the Operating Lease;

(iii) fund interest payments on the Operating Lease from draws on certain existing letters of credit, which were reimbursable by the Debtors;

and (iv) suspend litigation relating to the Operating Lease until January 15, 2021 with all parties reserving all rights with respect to future litigation claims.

For the period June 1, 2020 through December 31,2020, we disposed of approximately 198,000 lease vehicles pursuant to or otherwise in satisfaction of our vehicle disposition obligations under the Interim Lease Order.

Also, refer to the "Liquidity and Capital Resources" section below.

On October 12, 2020, the Bankruptcy Court entered an order authorizing Hertz and Donlen to enter into certain agreements in connection with a new asset-based securitization facility with DFLF for the purposes of new interim fleet financing.

On October 16, 2020, DFLF issued the Series 2020-1 Notes in an aggregate principal amount up to $400 million pursuant to this new facility, as disclosed in Note 6, "Debt," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report.

On October 29, 2020, the Bankruptcy Court entered an order authorizing the Debtors to obtain certain debtor-in-possession financing.

In accordance with the Bankruptcy Court’s order, on October 30, 2020, Hertz, as borrower, and Hertz Global and certain of its subsidiaries located in the U.S.

and Canada, in each case that are debtors in these Chapter 11 Cases, as guarantors, entered into the DIP Credit Agreement.

The DIP Credit Agreement provides for a superpriority secured debtor-in-possession credit facility comprised of the DIP Loans, of which (i) up to $1.0 billion can be used as equity for new interim fleet financing, giving the Debtors the ability to replenish their vehicle fleet in the future, and (ii) up to $800 million can be used for working capital and general corporate purposes.

The DIP Loans are available in multiple draws of at least (i) $250 million each or (ii) the remaining available commitments if such commitments are less than $250 million.

The DIP Loans bear interest at a rate of LIBOR plus 7.25% (subject to a 1.00% floor), which is reduced to LIBOR plus 6.75% upon a significant repayment of Pre-petition first lien debt.

As of December 31, 2020, Hertz drew down $250 million from the DIP Credit Agreement.

Refer to Note 6, "Debt," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report for further details.

On February 16, 2021, Hertz borrowed an additional $250 million as per the minimum draw requirement of the DIP Credit Agreement.

On November 24, 2020, the Bankruptcy Court entered an order authorizing the formation of HVIF and for the Debtors to obtain interim fleet financing.

In accordance with the Bankruptcy Court's order, on November 25, 2020, HVIF issued the Series 2020-1 Notes in an aggregate principal amount up to $4.0 billion, as further described in Note 6, "Debt," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report.

In 2020, the Bankruptcy Court approved the Lease Rejection Orders which were comprised of 359 off airport locations and 66 airport locations in our U.S.

RAC segment, as further disclosed in Note 10, "Leases," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report for further details.

As a result of the Lease Rejection Orders, we have been consolidating our off airport rental locations and will continue to do so in 2021.

On January 20, 2021, the Bankruptcy Court authorized the Second Lease Order, which extended the forbearance period related to the Operating Lease to September 30, 2021, provided that the Debtors dispose of 121,510 lease vehicles, at least 113,381 of which will be non-program vehicles, and reach a minimum cumulative vehicle disposition proceeds of $2.0 billion by September 30, 2021.

Additionally, the Second Lease Order directed the Debtors to (i) have no more than 157,262 lease vehicles by September 30, 2021 and (ii) make $756 million of base

stock issued and outstanding on the Effective Date, subject to dilution and certain conditions, or subscription rights to participate in the 2021 Rights Offering as discussed below.

In accordance with the Plan of Reorganization, Hertz Global commenced a 2021 Rights Offering, under which eligible holders of Hertz Global's common stock and certain eligible holders of the Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to $1.6 billion of shares of the reorganized Hertz Global common stock at a purchase price of $10.00 per share.

Pursuant to the EPCA, the Backstop Parties agreed to purchase all unsubscribed shares in the 2021 Rights Offering.

The final expiration date for the 2021 Rights Offering occurred on June 15, 2021, with eligible holders subscribing to purchase 127,362,114 shares (approximately $1.3 billion), with the Backstop Parties to purchase the remaining 36,137,887 shares (approximately $361 million).

Hertz Global closed the 2021 Rights Offering upon emergence from the Chapter 11 Cases on June 30, 2021.

Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share).

As a result of these transactions, on the Effective Date, Hertz Global issued 471,102,462 shares of common stock as follows:

• 14,133,024 shares to existing stockholders;

• 277,119,438 shares to Plan Sponsors pursuant to the EPCA;

• 127,362,114 shares to eligible participants pursuant to the Rights Offering;

• 52,487,886 shares to the Backstop Parties pursuant to the EPCA.

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock (the "Series A Preferred Stock") to Apollo and received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees.

As discussed below, during the fourth quarter of 2021, all shares of the Series A Preferred Stock were repurchased and retired by Hertz Global at $1,250 per share.

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

The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate.

The Public Warrants have an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends, certain dilutive events and recurring fair value adjustments.

On the Effective Date, reorganized Hertz entered into the First Lien Credit Agreement that provides for an aggregate amount of $2.8 billion comprised of the First Lien RCF in an aggregate committed amount of $1.3 billion plus Term Loans in an aggregate principal amount of $1.5 billion.

Additionally, reorganized Hertz entered into a new HVF III ABS facility in an aggregate of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion.

On the Effective Date, substantially all non-vehicle debt and all existing ABS facilities under the HVF II U.S.

ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization.

See Note 6, "Debt," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report for additional information.

NYSE Delisting and Nasdaq Listing

As a result of the filing of the Chapter 11 Cases, the NYSE suspended trading of Hertz Global common stock after the market close on October 29, 2020.

On October 30, 2020, Hertz Global common stock began trading exclusively on the OTC market under the symbol "HTZGQ," and was delisted from the NYSE on November 10, 2020.

Upon deregistration of Hertz Global common stock under Section 12(b) of the Exchange Act, Hertz Global common stock remained registered under Section 12(g) of the Exchange Act.

As discussed above, on the Effective Date, all of the Hertz Global common stock then existing was cancelled and Hertz Global issued 471,102,462 shares of its new common stock pursuant to the Plan of Reorganization.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

rent payments under the Operating Lease to the HVF trustee in the amount of nine equal monthly payments of $84 million commencing in January 2021 through September 2021.

On January 28, 2021, Hertz subsidiary, TCL Funding Limited Partnership, entered into the Funding LP Series 2021-A Notes which provide for aggregate maximum borrowings of CAD$350 million on a revolving basis, subject to availability.

The initial draw of CAD$120 million was used, in part, to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest, as disclosed in Note 6, "Debt," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report.

As a result of our actions to eliminate costs in 2020, we (i) negotiated rent concessions in the form of abatement and payment deferrals of fixed and variable rent payments for our airport and off airport locations in the amount of approximately $300 million which substantially represents amounts previously due in 2020;

(ii) reduced our revenue earning vehicle expenditures by $8.2 billion, or 60%, in 2020 compared to 2019;

(iii) reduced our non-vehicle capital asset expenditures by $126 million, or 56%, in 2020 compared to 2019 primarily due to a reduction in information technology and finance transformation program costs;

and (iv) sold approximately 308,000, or 6%, more vehicles in our U.S.

RAC segment in 2020 compared to 2019 due primarily to the Interim Lease Order.

We continue to review our cost structure and fleet size to align with expected rental car volumes.

NYSE Delisting

As a result of the filing of the Chapter 11 Cases, on October 29, 2020, the NYSE informed us that Hertz Global common stock was no longer suitable for listing on the NYSE and that the NYSE suspended trading of Hertz Global common stock (NYSE ticker symbol:

HTZ) after the market close on October 29, 2020.

Hertz Global common stock began trading exclusively on the over-the-counter market on October 30, 2020 under the symbol HTZGQ and was delisted from the NYSE on November 10, 2020 pursuant to Form 25.

Upon deregistration of Hertz Global common stock under Section 12(b) of the Exchange Act, Hertz Global common stock remains registered under Section 12(g) of the Exchange Act.

On November 8, 2021, reorganized Hertz Global successfully completed its Nasdaq listing, in which shares of its new common stock were registered with the SEC for a public offering by certain selling stockholders.

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

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

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

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

Share Repurchase Program for Common Stock

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

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

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

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

Tender Offer for Repurchase of Series A Preferred Stock

In November 2021, Hertz Global commenced a tender offer (the "Tender Offer") to repurchase all 1,500,000 outstanding shares of its Series A Preferred Stock at a per-share price of $1,250.

In December 2021, the Tender Offer expired and all 1,500,000 shares of the Series A Preferred Stock were repurchased at $1,250 per share for aggregate payments by Hertz Global of $1.9 billion, including approximately $7 million in certain fees.

The repurchased shares of Series A Preferred Stock were simultaneously retired.

For additional information about our restructured debt and equity, see Note 6, "Debt," and Note 16, "Equity and Mezzanine Equity – Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report.

We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands.

In addition to vehicle rental, we provide integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, where in the fourth quarter of 2020, we entered into a stock and asset purchase agreement to sell substantially all of the Donlen Assets as discussed below.

In addition to vehicle rental, we provided integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, where in the fourth quarter of 2020, we entered into a stock and asset purchase agreement to sell substantially all of the assets and certain liabilities as discussed below.

The sale was completed on March 30, 2021.

Our profitability is primarily a function of the volume, mix and pricing of rental transactions and the utilization of vehicles, the related ownership cost of vehicles and other operating costs.

Significant changes in the purchase price or residual values of vehicles or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes.

We continue to balance our mix of non-program and program vehicles based on market conditions, including residual values.

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

However, as a result of the Interim Lease Order, Hertz was directed to dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020, where the proceeds from the dispositions were to be used to make payments under the Operating Lease.

For the period from June 1, 2020 through December 31,2020, we disposed of approximately 198,000 lease vehicles pursuant to or otherwise in satisfaction of our vehicle disposition obligations under the Interim Lease Order.

Additionally, under the Second Lease Order issued in January 2021, Hertz was directed to dispose of an additional 121,510 lease vehicles between January 1, 2021 and September 30, 2021, where the proceeds from the dispositions will be used to make payments under the Operating Lease.

See the "Liquidity and Capital Resources" section of this MD&A for further information.

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

Significant changes in the purchase price or residual values of vehicles or interest rates can have a significant effect on our profitability depending on

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

Our total revenues are primarily derived from rental and related charges and consist of:

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

our ability to adjust pricing for these changes.

We continue to balance our mix of non-program and program vehicles based on market conditions, including residual values.

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

Our strategy includes optimization of our vehicle rental operations, disciplined performance management and evaluation of all locations.

In October 2021, we announced several new initiatives as part of a plan to offer the largest EV rental fleet, to lead in providing access to EVs for ride sharing and to digitize our vehicle disposition process.

These efforts are aimed at positioning us to be a leader in the future 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, including charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees.

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

• All other operations revenues - revenues from vehicle leasing and fleet management services by our Donlen business and other business activities, which in the fourth quarter of 2020, we entered into a stock and asset purchase agreement to sell substantially all of the Donlen Assets as discussed below.

We also had revenues from vehicle leasing and fleet management services by our Donlen business, which was sold on March 30, 2021.

Our expenses primarily consist of:

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

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

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

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

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

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

• Interest expense, net;

• Reorganization items, net, which includes charges associated with the Chapter 11 Cases, primarily professional fees.

Our Business Segments

We have identified three reportable segments, which are organized based on the products and services provided by our operating segments and the geographic areas in which our operating segments conduct business, as follows:

RAC - Rental of vehicles, as well as sales of value-added services, in the U.S.;

• International RAC - Rental and leasing of vehicles, as well as sales of value-added services, internationally;

• All Other Operations - Comprised primarily of our Donlen business, which provides vehicle leasing and fleet management services, and other business activities.

In the fourth quarter of 2020, we entered into a stock and asset purchase agreement to sell substantially all of the Donlen Assets.

Accordingly, the Donlen Assets have been classified as held for sale in the accompanying consolidated balance sheet as of December 31, 2020.

The sale is expected to close in the first quarter of 2021.

See Note 3, "Divestitures," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report for further information.

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

We assess performance and allocate resources based upon the financial information for our operating segments.

• Reorganization items, net, which includes charges associated with the Chapter 11 Cases, primarily professional fees which concluded on the Effective Date as a result of the implementation of the Plan of Reorganization.

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

As demand declines, fleet and staff are decreased accordingly.

A number of our other major operating costs, including airport concession fees, commissions and vehicle liability expenses, are directly related to revenues or transaction volumes.

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

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

Our Reportable Segments

In the second quarter of 2021, in connection with the Chapter 11 Emergence, and changes in how our CODM regularly reviews operating results and allocates resources, we revised our reportable segments to include Canada, Latin America and the Caribbean in our Americas RAC reportable segment, which were previously included in our International RAC reportable segment.

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

We have identified two reportable segments, which are consistent with our operating segments and

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

organized based on the products and services provided and the geographic areas in which business is conducted, as follows:

• Americas RAC - Rental of vehicles, as well as sales of value-added services, in the U.S.

Canada, Latin America and the Caribbean;

• International RAC - Rental and leasing of vehicles, as well as sales of value-added services, internationally and consists primarily of our Europe and other international locations.

Also, in the second quarter of 2021, as a result of the Donlen Sale, as further disclosed in Note 3, "Divestitures," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 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.

We assess performance and allocate resources based upon the financial information for our operating segments.

Revenue Earning Vehicles

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

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 and channel of disposition (e.g., auction, retail, dealer direct) 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) and market conditions.

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

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

We dispose of our non-program vehicles via auction, dealer-direct and our retail locations.

We dispose of our non-program vehicles via auction, dealer direct and retail locations.

In October 2021, we announced a nationwide agreement with Carvana with respect to our vehicle disposition process and our plan to position us at the center of the modern mobility ecosystem.

The Carvana arrangement allows us to digitize and modernize our retail sales process, reduce our reliance on wholesale channels and allow us to renew our vehicle supply more rapidly.

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

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

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

2020 Operating Overview

COVID-19 has caused a substantial reduction to airline travel during 2020.

As a large portion of our business is generated at airport locations, these disruptions have had, and we expect it to continue to have, a material adverse impact on our results of operations until such travel returns to historic levels.

We periodically review and adjust the mix between program and non-program vehicles in our fleet based on contract negotiations and the economic environment

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

pertaining to our industry in an effort to optimize the mix of vehicles.

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

2021 Operating Overview

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

Effective during the second quarter of 2021, we began reporting non-vehicle depreciation expense on a separate line item in the consolidated statement of operations, and accordingly prior periods have been restated to reflect this change.

The following charts provide several key factors influencing our results for the years ended December 31, 2021 , 2020 and 2019.

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

In this MD&A, certain amounts in the following tables are denoted as in millions.

In this MD&A, certain amounts in the following tables are denoted in millions.

Amounts such as percentages are calculated from the underlying numbers in thousands, and as a result, may not agree to the amount when calculated from the tables in millions.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

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497 2,030 2,563 (76) (21)

Non-vehicle depreciation and amortization 196 225 203 (13) 11

Selling, general and administrative expenses

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185 151 304 23 (50)

Interest expense, net

606 798 732 (24) 9

Intangible and other asset impairments 213 — — NM —

Total Interest expense, net 469 606 798 (23) (24)

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

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

Other (income) expense, net

(9) (59) (40) (85) 48

Reorganization items, net 175 — — NM —

(21) (9) (59) NM (85)

Reorganization items, net 513 175 — NM NM

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

Income (loss) before income taxes 1,474 (2,183) 20 NM NM

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(318) 328 (65) NM NM

Net income (loss) (1,855) (45) (222) NM (80)

Net income (loss) 1,156 (1,855) (45) NM NM

Net (income) loss attributable to noncontrolling interests

9 (8) 2 NM NM

Net income (loss) attributable to Hertz

1 9 (8) (90) NM

Net income (loss) attributable to Hertz

$ 1,157 $ (1,846) $ (53) NM NM

Adjusted Corporate EBITDA (a)

$ (995) $ 649 $ 433 NM 50

$ 2,130 $ (995) $ 649 NM NM

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

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

Total revenues decreased $4.5 billion in 2020 compared to 2019 due to reduced demand related to the impact from COVID-19 where there were decreases of $3.3 billion and $1.2 billion in our U.S.

RAC and International RAC segments, respectively.

RAC revenues decreased due primarily to lower volume.

Excluding a $5 million impact of fx, revenues for our International RAC segment decreased $1.2 billion also due primarily to lower volume and pricing.

DOE decreased $1.9 billion in 2020 compared to 2019 due primarily to decreases of $1.3 billion and $570 million in our U.S.

RAC and International RAC segments, respectively.

The decrease in our U.S.

RAC segment is due primarily to lower volume driven by the impact from COVID-19 on total revenues described above, lower personnel costs and other cost elimination initiatives.

Excluding the $3 million impact of fx, DOE for International RAC decreased $573 million due primarily to lower volume driven by the impact from COVID-19 on total revenues described above and lower personnel costs due to employee furloughs and associated government support across Europe related to COVID-19.

Depreciation of revenue earning vehicles and lease charges decreased $533 million in 2020 compared to 2019 due primarily to decreases of $333 million and $165 million in our U.S.

RAC and International RAC segments, respectively.

The decreases in our U.S.

RAC and International RAC segments are due primarily to a reduction in fleet size in response to pandemic-related declines in consumer demand.

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

Americas RAC revenues increased due primarily to increased pricing resulting from growth in travel demand and industry constraints on vehicles due to the Chip Shortage affecting new vehicle production.

Excluding a $42 million impact of fx, revenues for our International RAC segment increased $71 million also due primarily to increased pricing resulting primarily from industry constraints on vehicles due to the Chip Shortage affecting new vehicle production, partially offset by lower volume.

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

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

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

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

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

SG&A decreased $305 million in 2020 compared to 2019 due primarily to lower marketing costs in our U.S.

and International RAC segments, lower personnel costs in our U.S.

RAC segment and lower information technology and finance transformation costs in our corporate operations.

Vehicle interest expense, net decreased $38 million in 2020 compared to 2019 due primarily to lower vehicle debt levels primarily in our U.S.

Non-vehicle interest expense, net decreased $154 million in 2020 compared to 2019 due primarily to lower debt levels, lower market interest rates and the suspension of interest on certain non-vehicle debt as a result of filing the Chapter 11 Cases.

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

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

The decrease in all other operations was due to the sale of our Donlen business in the first quarter of 2021.

Excluding a $6 million impact of fx, depreciation of revenue earning vehicles and lease charges for our International RAC segment decreased $95 million due primarily to right sizing of the fleet, the Chip Shortage affecting new vehicle production and strength in residual values.

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

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

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

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

Non-vehicle interest expense, net increased $34 million in 2021 compared to 2020 due primarily to higher amortization of capitalized deferred financing costs, higher letter of credit fees and higher average interest rates due primarily to the issuance of new unsecured senior notes in the fourth quarter of 2021, the issuance of the Term Loans in the second quarter of 2021 and the DIP Credit Agreement which was entered into in the third quarter of 2020, partially offset by interest on certain non-vehicle debt being suspended as a result of filing the Chapter 11 Cases.

We incurred charges of $213 million for impairment of intangible and other assets in 2020 due primarily to $124 million impairment of technology-related intangible assets and $69 million impairment of capitalized cloud computing implementation costs in our corporate operations due to uncertainty surrounding our financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases.

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

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

We incurred a charge of $133 million in 2020 in our corporate operations resulting from the full write-off of the 2019 Master Loan with Hertz Holdings due to the filing of the Chapter 11 Cases.

We had other income of $21 million in 2021 compared to other income of $9 million in 2020.

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

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

Other income of $59 million in 2019 was primarily comprised of a $30 million gain on marketable securities and a $39 million gain on non-vehicle capital assets.

We incurred $513 million of net reorganization charges in 2021, primarily in our corporate operations, which was comprised primarily of professional fees associated with the Chapter 11 Cases, the loss on extinguishment of certain debt resulting from the implementation of the Plan of Reorganization, a prior plan sponsor breakup fee and other miscellaneous charges related to the implementation of the Plan of Reorganization.

We incurred $175 million of net reorganization charges in 2020 in our corporate operations for professional fees and other costs associated with the Chapter 11 Cases.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

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

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

We recorded a tax benefit of $328 million in 2020 compared to a tax provision of $65 million in 2019.

The effective income tax rate and related tax benefit in 2020 compared to 2019 were driven by increased losses on our operations due to the effects of COVID-19, primarily offset by the impact of valuation allowances on net deferred tax assets for certain foreign and domestic jurisdictions.

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

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

Year Ended December 31, 2020 Compared with Year Ended December 31, 2019

Total revenues increased $276 million in 2019 compared to 2018 due to an increase of $459 million in our U.S.

RAC segment, partially offset by a decrease of $107 million and $76 million in our International RAC and our All Other Operations segments, respectively.

RAC revenues increased due to a 4% increase in volume and a 2% increase in Total RPD.

Excluding the impact of fx, revenues for our International RAC segment were flat.

The decrease in All Other Operations was due to the impact of a change in presentation for certain leased vehicles beginning in the first quarter of 2019.

DOE increased $131 million in 2019 compared to 2018 primarily due to an increase of $132 million and $7 million in our U.S.

RAC and International RAC segments, respectively, partially offset by a $9 million decrease in our All Other Operations segment.

The increase in U.S.

RAC DOE was driven by increased volume.

Excluding the $69 million impact of fx, DOE for International RAC increased $76 million driven primarily by an increase in vehicle-related expenses.

Depreciation of revenue earning vehicles and lease charges decreased $125 million in 2019 compared to 2018 primarily due to a decrease of $95 million and $22 million in our All Other Operations and U.S.

RAC segments, respectively.

The decrease in our All Other Operations segment was due to the impact of a change in presentation

Total revenues decreased $4.5 billion in 2020 compared to 2019 due to reduced demand related to the impact from COVID-19 where there were decreases of $3.5 billion and $1.0 billion in our Americas RAC and International RAC segments, respectively.

Americas RAC revenues decreased due primarily to lower volume.

Excluding a $6 million impact of fx, revenues for our International RAC segment decreased $1.0 billion also due primarily to lower volume and pricing.

DOE decreased $1.9 billion in 2020 compared to 2019 due primarily to decreases of $1.4 billion and $482 million in our Americas RAC and International RAC segments, respectively.

The decrease in our Americas RAC segment was due primarily to lower volume driven by the impact from COVID-19 on total revenues described above, lower personnel costs and other cost elimination initiatives.

Excluding the $4 million impact of fx, DOE for International RAC decreased $486 million due primarily to lower volume driven by the impact from COVID-19 on total revenues described above and lower personnel costs due to employee furloughs and associated government support across Europe related to COVID-19.

Depreciation of revenue earning vehicles and lease charges decreased $533 million in 2020 compared to 2019 due primarily to decreases of $354 million and $144 million in our Americas RAC and International RAC segments, respectively.

The decreases in our Americas RAC and International RAC segments were due primarily to a reduction in fleet size in response to pandemic-related declines in consumer demand.

Non-vehicle depreciation and amortization increased $22 million in 2020 compared to 2019 due primarily to in-service placement of internally developed software assets in our Americas RAC segment.

SG&A decreased $305 million in 2020 compared to 2019 due primarily to lower marketing costs in our Americas RAC and International RAC segments, lower personnel costs in our Americas RAC segment and lower information technology and finance transformation costs in our corporate operations.

Vehicle interest expense, net decreased $38 million in 2020 compared to 2019 due primarily to lower vehicle debt levels primarily in our Americas RAC segment.

We incurred a charge of $133 million in 2020 in our corporate operations resulting from the full write-off of the 2019 Master Loan with Hertz Holdings due to the filing of the Chapter 11 Cases.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

for certain leased vehicles beginning in the first quarter of 2019.

The decrease in our U.S.

RAC segment was primarily due to our vehicle acquisition strategy and continued strength in residual values.

SG&A decreased $47 million in 2019 compared to 2018 primarily due to a decrease in personnel-related expenses in our Corporate operations and International RAC segment and the impact from fx in our International RAC segment, partially offset by increased marketing charges in our U.S.

RAC segment and increased information technology and finance transformation charges in our Corporate operations.

Vehicle interest expense, net increased $45 million in 2019 compared to 2018 primarily due to an increase in debt levels resulting from higher average fleet primarily in our U.S.

RAC segment and higher market interest rates.

Additionally, there was a $20 million loss on extinguishment of debt recorded in our International RAC segment in 2018 with no comparable charge in 2019.

Non-vehicle interest expense, net increased $20 million in 2019 compared to 2018 primarily due to a $43 million loss on extinguishment of debt primarily associated with the partial redemption of the Senior Second Priority Secured Notes in 2019 with no comparable charges in 2018, partially offset by lower levels of non-vehicle debt in 2019 due to net proceeds from the Rights Offering which were used to redeem the 2020 and 2021 Notes.

Other income of $59 million in 2019 was primarily comprised of a $30 million gain on marketable securities and a $39 million gain on non-vehicle capital assets.

Other income of $40 million in 2018 was primarily comprised of a $20 million gain on marketable securities, $10 million of net pension benefit income and a $6 million legal settlement related to an oil spill in the Gulf of Mexico in 2010.

We incurred $175 million of net reorganization charges in 2020 in our corporate operations for professional fees and other costs associated with the Chapter 11 Cases.

The effective tax rate in 2020 was 15% compared to 326% in 2019.

We recorded a tax provision of $65 million in 2019 compared to a tax benefit of $28 million in 2018.

The effective income tax rate and related tax provision in 2019 are greater than 2018 due to an increase in the valuation allowance relating to losses in certain U.S.

jurisdictions and an increase in pretax operating results.

We recorded a tax benefit of $328 million in 2020 compared to a tax provision of $65 million in 2019.

CONSOLIDATED RESULTS OF OPERATIONS - HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had $2 million, $7 million and $7 million of interest expense, net, during 2020, 2019 and 2018, respectively, that was incremental to the amounts shown for Hertz.

Hertz Global had $ 627 million of expense from the change in fair value of Public Warrants that was incremental to Hertz for the year ended December 31, 2021.

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

Hertz Global had $2 million and $7 million of interest expense, net, during 2020 and 2019, respectively, that was incremental to the amounts shown for Hertz.

These amounts represent interest associated with amounts outstanding under a master loan agreement between the companies.

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In 2019, Hertz had $2 million of tax provision that was incremental to the amounts shown for Hertz Global.

In 2018, Hertz Global had $2 million of income tax benefit that was incremental to the amounts shown for Hertz.

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

As of December 31, 2020, our U.S.

Rental Car operations had a total of approximately 3,900 corporate and franchisee locations, comprised of 1,500 airport and 2,400 off airport locations.

The approximate 7% decrease in total locations from 2019 is primarily the product of a location rationalization effort in the Chapter 11 Cases as reflected in the Lease Rejection Orders entered by the Bankruptcy Court.

See Note 10, "Leases," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report for further details.

As of December 31, 2021, our Americas RAC operations had a total of approximately 5,400 corporate and franchisee locations, comprised of 1,900 airport and 3,500 off airport locations.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

Rental Car operations sold approximately 308,000, 290,000 and 263,000 non-program vehicles during the years ended December 31, 2020, 2019 and 2018, respectively.

In 2020, the increase in units sold was due primarily to fleet size reductions in response to pandemic-related volume declines.

Results of operations and our discussion and analysis for our U.S.

RAC segment are as follows:

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

Years Ended December 31, Percent Increase/(Decrease)

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53 % 74 % 58 %

Non-vehicle depreciation and amortization $ 166 $ 182 $ 159 (9) 15

Selling, general and administrative expenses

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$ 213 $ 329 $ 353 (35) (7)

Reorganization items, net $ 80 $ 8 $ — NM NM

Adjusted EBITDA

$ (791) $ 480 $ 226 NM 113

$ 2,173 $ (810) $ 512 NM NM

Transaction Days (in thousands) (b)

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Total RPU Per Month (in whole dollars) (e)

$ 697 $ 1,062 $ 1,049 (34) 1

$ 1,456 $ 716 $ 1,083 NM (34)

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

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Percentage of program vehicles as of period end

0.4 % 3 % 11 %

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

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

RAC revenues decreased $3.3 billion in 2020 compared to 2019 due primarily to lower volume.

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

The 40% increase in Total RPD was driven primarily by higher pricing across the industry due to growth in travel demand and industry-wide constraints on vehicles due to the Chip Shortage affecting new vehicle production.

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

Volume increased in our airport locations by 44%.

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

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

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

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

Excluding a $5 million fx impact, DOE increased $534 million due primarily to higher volume driven by the increased travel demand discussed above and increased vehicle maintenance costs due primarily to longer vehicle holding periods resulting from new vehicle

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

production constraints due to the Chip Shortage, partially offset by lower fleet-related costs due to a reduced fleet size and lower facility costs resulting from cost-reduction initiatives.

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

SG&A for Americas RAC was comparable to 2020 in which 2021 incurred lower personnel costs due to cost-reduction initiatives, partially offset by higher marketing spend during our peak season in 2021.

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

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

Year Ended December 31, 2020 Compared with Year Ended December 31, 2019

Total Americas RAC revenues decreased $3.5 billion in 2020 compared to 2019 due primarily to lower volume.

The 47% decrease in Transaction Days was driven by the impact from COVID-19 with declines in leisure and most business categories, excluding delivery services in our off airport locations where volume and pricing increased compared to 2019.

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Off airport revenues comprised 44% of total revenues in 2020 as compared to 32% for 2019 due primarily to customer demand changes associated with COVID-19.

Depreciation of revenue earning vehicles and lease charges for U.S.

RAC decreased $333 million in 2020 compared to 2019.

Depreciation of revenue earning vehicles and lease charges for Americas RAC decreased $354 million in 2020 compared to 2019.

Average Vehicles decreased 21% due in part to a reduction in fleet size in response to pandemic-related declines in consumer demand.

Depreciation Per Unit Per Month was comparable to 2019.

RAC decreased $1.3 billion in 2020 compared to 2019 due primarily to lower volume driven by the impact from COVID-19 on total revenues described above, lower personnel costs due to an employee restructuring program that commenced in 2020 in response to COVID-19 and other cost elimination initiatives.

SG&A for U.S.

RAC decreased $215 million in 2020 compared to 2019 due primarily to lower marketing and personnel costs in response to COVID-19 and other cost elimination initiatives.

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AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

Vehicle interest expense for U.S.

RAC decreased $22 million in 2020 compared to 2019 due primarily to lower debt levels as a result of vehicle dispositions resulting from the Interim Lease Order.

Year Ended December 31, 2019 Compared with Year Ended December 31, 2018

RAC revenues increased $459 million in 2019 compared to 2018 due to higher volume and pricing.

The 4% increase in Transaction Days was driven by growth in retail and TNC rentals.

Volume increased in both our off airport and airport locations by 8% and 2%, respectively.

Total RPD increased by 2%.

Off airport revenues comprised 32% of total revenues in 2019 as compared to 31% for 2018.

Depreciation of revenue earning vehicles and lease charges for U.S.

RAC decreased by $22 million in 2019 compared to 2018.

Net Depreciation Per Unit Per Month decreased to $258 in 2019 compared to $276 in 2018 primarily due to our vehicle acquisition strategy and continued strength in residual values.

RAC increased $132 million in 2019 compared to 2018 driven by volume, partially offset by a decrease in other non-vehicle related charges.

SG&A for U.S.

RAC increased $23 million in 2019 compared to 2018 primarily due to increased marketing charges;

SG&A as a percentage of revenues was flat year over year.

Vehicle interest expense for U.S.

RAC increased $54 million in 2019 compared to 2018 primarily due to higher average fleet and higher market interest rates.

International Rental Car

As of December 31, 2020, our international vehicle rental operations had approximately 8,100 corporate and franchisee locations, comprised of 2,000 airport and 6,100 off airport locations in approximately 160 countries and regions including the countries of Australia, Canada, New Zealand, and in the regions of Africa, Asia, the Caribbean, Europe, Latin America and the Middle East.

DOE for Americas RAC decreased $1.4 billion in 2020 compared to 2019 due primarily to lower volume driven by the impact from COVID-19 on total revenues described above, lower personnel costs due to an employee restructuring program that commenced in 2020 in response to COVID-19 and other cost elimination initiatives.

Non-vehicle depreciation and amortization for Americas RAC increased $24 million in 2020 compared to 2019 due primarily to in-service placement of internally developed software assets.

SG&A for Americas RAC decreased $216 million in 2020 compared to 2019 due primarily to lower marketing and personnel costs in response to COVID-19 and other cost elimination initiatives.

Vehicle interest expense for Americas RAC decreased $24 million in 2020 compared to 2019 due primarily to lower debt levels as a result of vehicle dispositions resulting from the Interim Lease Order.

International RAC

As of December 31, 2021, our International RAC operations had approximately 6,000 corporate and franchisee locations, comprised of 1,400 airport and 4,600 off airport locations in approximately 110 countries and regions including the countries of Australia, New Zealand, and in the regions of Africa, Asia, Europe and the Middle East.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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 are as follows:

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

Years Ended December 31, Percent Increase/(Decrease)

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61 % 74 % 59 %

Non-vehicle depreciation and amortization $ 16 $ 19 $ 20 (17) (7)

Selling, general and administrative expenses

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$ 59 $ 80 $ 89 (26) (10)

Reorganization items, net $ 12 $ — $ — NM NM

Adjusted EBITDA

$ (248) $ 147 $ 231 NM (36)

$ 90 $ (229) $ 115 NM NM

Transaction Days (in thousands) (b)

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

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

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

Total RPD increased 17% driven primarily by higher pricing across the industry due to industry-wide constraints on vehicle supply due to the Chip Shortage affecting new vehicle production and higher leisure mix in Europe beginning in the second half of 2021.

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

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

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

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

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

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

Excluding a $30 million fx impact, DOE decreased $72 million due primarily to lower volume driven by the impact of travel restrictions resulting from

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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

COVID-19 and lower facility costs resulting from cost-reduction initiatives, partially offset by increases related to restructuring initiatives.

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

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

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

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

Reorganization items, net for International RAC increased $12 million in 2021 compared to 2020 due primarily to advisory fees related to debt refinancings and the loss on extinguishment of the European Vehicle Notes resulting from the implementation of the Plan of Reorganization during the first half of 2021.

Year Ended December 31, 2020 Compared with Year Ended December 31, 2019

Total revenues for International RAC decreased $1.0 billion in 2020 compared to 2019 due to lower volume and pricing.

Transaction Days deceased 51% and Total RPD decreased 10%.

Transaction Days decreased 50% and Total RPD decreased 9%.

Excluding a $6 million fx impact, revenues decreased $1.0 billion due to lower volume and pricing, primarily in Europe, across all leisure and business categories driven by the impact of COVID-19.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

Year Ended December 31, 2019 Compared with Year Ended December 31, 2018

Total revenues for International RAC decreased $107 million in 2019 compared to 2018.

Excluding a $108 million fx impact, revenues were flat.

Depreciation of revenue earning vehicles and lease charges for International RAC decreased $8 million in 2019 compared to 2018.

Excluding a $22 million fx impact, depreciation increased $14 million, or 3%.

Depreciation Per Unit Per Month for International RAC increased to $205 from $199 for 2019 versus 2018 due in part to a richer fleet mix in Europe in 2019 versus 2018 and declining residual values year over year.

DOE for International RAC increased $7 million in 2019 compared to 2018.

Excluding a $69 million fx impact, DOE increased $76 million, or 6%, primarily driven by vehicle-related expenses.

SG&A for International RAC decreased $27 million in 2019 compared to 2018 due in part to a $12 million fx impact and a decrease in personnel-related expenses.

Vehicle interest expense for International RAC decreased $17 million in 2019 compared to 2018 primarily due to a $20 million loss on extinguishment of debt associated with the redemption of the 4.375% European Vehicle Senior Notes in 2018.

All Other Operations

The All Other Operations segment is primarily comprised of our Donlen business, as such, our discussion is limited to Donlen.

In the fourth quarter of 2020, we entered into a stock and asset purchase agreement to sell the Donlen Assets.

The sale is expected to close in the first half of 2021.

Results of operations for this segment are as follows:

Years Ended December 31, Percent Increase/(Decrease)

($ In millions) 2020 2019 2018 2020 vs.

2019 2019 vs.

Total revenues $ 630 $ 672 $ 748 (6)% (10)%

Depreciation of revenue earning vehicles and lease charges

$ 435 $ 469 $ 564 (7) (17)

Direct vehicle and operating expenses $ 27 $ 28 $ 37 (4) (24)

Selling, general and administrative expenses $ 20 $ 35 $ 37 (43) (6)

Vehicle interest expense

$ 46 $ 52 $ 43 (11) 19

Adjusted EBITDA $ 93 $ 100 $ 82 (7) 22

Average Vehicles - Donlen

192,900 210,000 188,100 (8) 12

In 2020 compared to 2019, the impact of COVID-19 on our Donlen business was less severe than our car rental operations, where revenues and Adjusted EBITDA decreased 6% and 7% as compared to 2019, respectively.

Donlen had favorable re sults in 2019 compared to 2018.

Lower year-over-year revenue and depreciation of revenue earning vehicles and lease charges were driven by the impact of a change in presentation for certain leased vehicles in 2019 versus 2018.

Excluding the $79 million reduction in revenues from the change in presentation in 2019 and the $53 million benefit in 2018 of vehicles leased under sales-type leases , revenue grew 8%.

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AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

increase in overall average vehicles in 2019 as compared to 2018 is due to new customer acquisitions and growth in the existing customer portfolio.

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

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vehicle debt-related charges;

loss on extinguishment of vehicle debt;

restructuring and restructuring related charges;

goodwill, intangible and tangible asset impairments and write-downs;

intercompany loan write-offs;

information technology and finance transformation costs;

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pre-reorganization items and non-debtor financing charges;

and certain other miscellaneous items.

gain from the sale of a business and certain other miscellaneous items.

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

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Vehicle debt-related charges (2)

Loss on extinguishment of vehicle debt (2)

Restructuring and restructuring related charges (3)

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Pre-reorganization and non-debtor financing charges (8)

Gain from the sale of Donlen (9)

Other items (10)

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Vehicle debt-related charges (2)

Loss on extinguishment of vehicle debt (2)

Restructuring and restructuring related charges (3)

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Pre-reorganization and non-debtor financing charges (8)

Gain from the sale of Donlen (9)

Change in fair value of Public Warrants (11)

Other items (10)

Adjusted Corporate EBITDA $ 2,130 $ (995) $ 649

(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.

See Note 6, "Debt," in Part II, Item 8 of this 2021 Annual Report for further information.

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

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

GAAP, excluding impairments and asset write-downs.

See Note 10, "Restructuring," in Part II, Item 8 of this 2021 Annual Report for further information.

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

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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

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

(2) In 2020, represents a $5 million write-off of deferred financing costs resulting from the European ABS waiver agreements.In 2018, primarily represents $20 million of early redemption premium and write-off of deferred financing costs associated with the full redemption of the 4.375% European Vehicle Senior Notes due January 2019.

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

GAAP, excluding impairments and asset write-downs.

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

In 2018, also includes consulting costs, legal fees and other expenses related to the previously disclosed accounting review and investigation.

(4) In 2020, represents a $193 million impairment of technology-related intangible and other assets and a $20 million impairment of the Hertz tradename, as disclosed in Note 5, "Goodwill and Intangible Assets, Net," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report.

(5) In 2020, represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings.

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

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

See Note 5, "Goodwill and Intangible Assets, Net," in Part II, Item 8 of this 2021 Annual Report.

(5) Represented the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 15 , " Related Party Transactions ," in Part II, Item 8 of this 2021 Annual Report.

(6) Represents costs associated with our information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize our systems and processes.

(7) In 2020, represents charges incurred associated with the filing of the Chapter 11 Cases, as described in Note 20, "Reorganization Items, Net," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report.

(8) In 2020, represents charges incurred prior to the filing of the Chapter 11 Cases, which are comprised of preparation charges for the reorganization, such as professional fees.

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

(9) Represents miscellaneous items, including non-cash stock-based compensation charges.

In 2020, also includes $16 million associated with the Donlen Asset Sale, partially offset by $18 million for losses associated with certain vehicle damages.

In 2019, also includes a $30 million gain on marketable securities and a $39 million gain on the sale of non-vehicle capital assets.

In 2018, also includes a $20 million gain on marketable securities and a $6 million legal settlement received related to an oil spill in the Gulf of Mexico in 2010.

(7) Represents charges associated with the filing of and the emergence from the Chapter 11 Cases, as described in Note 21, "Reorganization Items, Net," in Part II, Item 8 of this 2021 Annual Report.

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

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

See Note 1 , " Background ," in Part II, Item 8 of this 2021 Annual Report.

(9) 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 2021 Annual Report.

(10) Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to non-controlling interests.

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

For 2020, also included charges of $18 million for losses associated with certain vehicle damages which were recorded in the second quarter, partially offset by a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.

(11) Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants, as disclosed in Note 12 , " Fair Value Measurements ," in Part II, Item 8 of this 2021 Annual Report.

(b) Transaction Days represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period.

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The calculation of Vehicle Utilization is shown in the table below:

Rental Car International Rental Car

Americas RAC International RAC

Years Ended December 31,

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

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

(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.

As discussed above, effective in the third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues, and accordingly, prior periods have been restated to conform with the revised definition.

Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends.

The calculation of Total RPD is shown below:

Rental Car International Rental Car

Americas RAC International RAC

Years Ended December 31,

($ in millions, except as noted) 2021 2020 2019 2021 2020 2019

Total Revenues $ 3,656 $ 6,938 $ 6,480 $ 972 $ 2,169 $ 2,276

Ancillary retail vehicle sales revenues (111) (122) (102) — — —

Revenues $ 6,215 $ 3,756 $ 7,208 $ 985 $ 872 $ 1,899

Foreign currency adjustment (1)

(3) 3 8 25 66 166

Total Rental Revenues $ 3,545 $ 6,816 $ 6,378 $ 967 $ 2,180 $ 2,178

Total Revenues-adjusted for foreign currency $ 6,212 $ 3,759 $ 7,216 $ 1,010 $ 938 $ 2,065

Transaction Days (in thousands) 100,085 85,016 161,278 20,488 22,283 44,720

Total RPD (in whole dollars) $ 42.88 $ 43.73 $ 42.67 $ 39.32 $ 43.45 $ 43.21

Total RPD (in dollars) $ 62.07 $ 44.22 $ 44.75 $ 49.30 $ 42.12 $ 46.18

(1) Based on December 31, 2020 foreign currency exchange rates for all periods presented.

(e) Total RPU Per Month is calculated as Total Rental Revenues divided by the Average Vehicles in each period and then divided by the number of months in the period reported.

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

As discussed above, effective in the third quarter of 2021, we revised our calculation of Total RPU to include ancillary retail vehicle sales revenues, and accordingly, prior periods have been restated to conform with the revised definition.

The calculation of Total RPU Per Month is shown below:

Rental Car International Rental Car

Americas RAC International RAC

Years Ended December 31,

($ in millions, except as noted) 2021 2020 2019 2021 2020 2019

Total Rental Revenues $ 3,545 $ 6,816 $ 6,378 $ 967 $ 2,180 $ 2,178

Total Revenues-adjusted for foreign currency $ 6,212 $ 3,759 $ 7,216 $ 1,010 $ 938 $ 2,065

Average Vehicles (in whole units) 355,647 437,547 555,220 77,643 102,793 160,382

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The calculation of Depreciation Per Unit Per Month is shown below:

Rental Car International Rental Car

Americas RAC International RAC

Years Ended December 31,

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(DEBTORS-IN-POSSESSION)

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

and internationally.

Cash and Cash Equivalents

As of December 31, 2021, we had $2.3 billion of unrestricted cash and unrestricted cash equivalents and $393 million of restricted cash and restricted cash equivalents.

As of December 31, 2021, $489 million of unrestricted cash and unrestricted cash equivalents and $78 million of restricted cash and restricted cash equivalents were held by our subsidiaries outside of the U.S.

As a result of the impact of COVID-19 discussed above, we changed our indefinite reinvestment assertion with respect to our non-U.S.

Beginning in the quarterly period ending March 31, 2020, we no longer assert permanent reinvestment with respect to our non-U.S.

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

Liquidity Considerations Related to COVID-19

As discussed above, the outbreak of COVID-19 has spread across the globe, resulting in a global economic slowdown and disruptions of travel and other industries, all of which are continuing to negatively impact our business and industry.

In addition, COVID-19 has resulted in our employees, contractors, suppliers, customers and other business partners being prevented from conducting normal business activities temporarily or for an indefinite period of time.

This was largely caused by shutdowns that were initially requested or mandated by governmental authorities.

Additionally, individuals voluntarily reduced travel in attempts to avoid the outbreak.

rental car operations.

Voluntary Petitions for Bankruptcy

In connection with the expiration of the Forbearance Agreement and the Waiver Agreements described above and the continuing economic impact from COVID-19, on May 22, 2020, the Debtors filed Petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

The Chapter 11 Cases are being jointly administered by the Bankruptcy Court under the caption In re The Hertz Corporation, et al., Case No.

Voluntary Petitions for Bankruptcy and Emergence

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

The Chapter 11 Cases were jointly administered for procedural purposes only under the caption In re The Hertz Corporation, et al., Case No.

20-11218 (MFW) .

The information on this website is not incorporated by reference and does not constitute part of this 2021 Annual Report.

In May 2020, the Bankruptcy Court approved motions filed by the Debtors that were designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, customers and employees.

The Debtors are authorized to conduct business activities in the ordinary course, and pursuant to orders entered by the Bankruptcy Court, the Debtors are authorized to, among other things and subject to the terms and conditions of such orders (i) pay employees’ wages and related obligations;

(ii) pay certain taxes;

(iii) pay critical vendors and certain fees to airport authorities and provide adequate protection;

(iv) continue to maintain certain customer programs;

(v) maintain insurance programs;

(vi) use certain cash collateral on an interim basis;

(vii) honor certain obligations to franchisees;

and (viii) maintain existing cash management systems.

Borrowing Capacity and Availability

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of our existing debt obligations.

As a result of the filing of the Chapter 11 Cases, the remaining capacity

As disclosed in Note 1, "Background," in Part II, Item 8 of this 2021 Annual Report, on May 14, 2021, the Debtors filed the Plan of Reorganization, and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021.

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court.

On June 30, 2021, the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11.

On the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:

• $2.8 billion from the purchase of reorganized Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;

• $1.6 billion from the purchase of reorganized Hertz Global common stock pursuant to the 2021 Rights Offering;

• $1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of Series A Preferred Stock of reorganized Hertz Global by Apollo;

• $1.5 billion in proceeds from our Term Loans.

Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the Plan of Reorganization as follows:

• the holders of administrative, priority and secured claims received payment in cash in full;

• the holders of the approximately $1.0 billion of obligations owed with respect to the DIP Credit Agreement received payment in cash in full;

• the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;

• the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;

• the holders of the €725 million European Vehicle Notes received payment in cash in full;

• the holders of the €257 million Second HIL Credit Agreement received payment in cash in full;

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

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

• the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

On the Effective Date, substantially all then-existing non-vehicle debt and all then-existing ABS facilities under the HVF II U.S.

ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization.

Public Warrants

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

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

The outstanding warrants are exercisable through June 30, 2051.

As of December 31, 2021, the exercise price remains $13.80.

See the subsequent sections under "Equity Financing" and "Debt Financing" for additional discussions about liquidity events that occurred on the Effective Date and thereafter.

Cash Flows - Hertz

As of December 31, 2021 and 2020, Hertz had unrestricted cash and unrestricted cash equivalents of $2.3 billion and $1.1 billion, respectively, and restricted cash and restricted cash equivalents of $393 million and $383 million, respectively.

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

Years Ended December 31, 2021 vs.

2020 2020 vs.

(In millions) 2021 2020 2019 $ Change $ Change

Cash provided by (used in):

Operating activities $ 1,806 $ 956 $ 2,907 $ 850 $ (1,951)

Investing activities (3,544) 4,591 (4,425) (8,135) 9,016

Financing activities 2,872 (5,403) 1,467 8,275 (6,870)

Effect of exchange rate changes (34) 46 1 (80) 45

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 1,100 $ 190 $ (50) $ 910 $ 240

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

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

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

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

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

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

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

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

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

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

Year ended December 31, 2020 compared with year ended December 31, 2019

In 2020, cash flows from operating activities decreased by $2.0 billion year over year due primarily to the $1.8 billion change in net loss driven by the impact of COVID-19 discussed above, partially offset by the associated reduction of $331 million in working capital requirements.

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

However, Hertz disposed of approximately 198,000 lease vehicles between June 1, 2020 and December 31, 2020, pursuant to or otherwise in satisfaction of our vehicle disposition obligations under an order from the Bankruptcy Court (the "Interim Lease Order").

There was a $9.0 billion decrease in the use of cash for investing activities year over year.

Cash outflows for revenue earning vehicles decreased $8.2 billion as we reduced our commitments to purchase vehicles, primarily in our Americas RAC segment, due to the impact from COVID-19 and a $612 million increase of cash proceeds from disposals of revenue earning vehicles as we accelerated the disposition of vehicles due to the Interim Lease Order.

Net financing cash outflows were $5.4 billion in 2020 compared to cash inflows of $1.5 billion in 2019 primarily due to a $8.5 billion reduction in vehicle debt borrowings as we reduced our commitments to purchase vehicles, partially offset by a $1.7 billion reduction in non-vehicle repayments, net of new borrowings, primarily resulting from the Chapter 11 Cases.

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

Cash Flows - Hertz Global

As of December 31, 2021 and 2020, Hertz Global had unrestricted cash and unrestricted cash equivalents of $2.3 billion and $1.1 billion, respectively, and restricted cash and restricted cash equivalents of $393 million and $411 million, respectively.

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

Years Ended December 31, 2021 vs.

2020 2020 vs.

(In millions) 2021 2020 2019 $ Change $ Change

Cash provided by (used in):

Operating activities $ 1,806 $ 953 $ 2,900 $ 853 $ (1,947)

Investing activities (3,544) 4,591 (4,425) (8,135) 9,016

Financing activities 2,845 (5,372) 1,474 8,217 (6,846)

Effect of exchange rate changes (34) 46 1 (80) 45

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents $ 1,073 $ 218 $ (50) $ 855 $ 268

Fluctuations in operating, investing and financing cash flows from period to period were due to the same factors as those disclosed for Hertz above, with the exception of any cash inflows or outflows related to proceeds or disbursements from the issuance or repurchase of stock as disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report, the issuance or exercise of Public Warrants as disclosed in Note 18, "Public Warrants - Hertz Global," to the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report and the master loan agreement between Hertz and Hertz Global.

Equity Financing

NYSE Delisting and Nasdaq Listing

As a result of the filing of the Chapter 11 Cases, the NYSE suspended trading of Hertz Global common stock after the market close on October 29, 2020.

On October 30, 2020, Hertz Global common stock began trading exclusively on the over-the-counter under the symbol HTZGQ, and was delisted from the NYSE on November 10, 2020.

Upon deregistration of Hertz Global common stock under Section 12(b) of the Exchange Act, Hertz Global common stock remained registered under Section 12(g) of the Exchange Act.

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

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

Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate purchase price of $300 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021 under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report.

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

Share Repurchase Program for Common Stock

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

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

Between the inception of the share repurchase program and December 31, 2021, a total of 17,106,026 shares of Hertz Global's common stock were repurchased at an average share price of $23.83, resulting in an aggregate purchase price of $408 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021 under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2021 Annual Report.

Tender Offer for Repurchase of Series A Preferred Stock

In November 2021, Hertz Global commenced the Tender Offer to repurchase all 1,500,000 outstanding shares of its Series A Preferred Stock at a per-share price of $1,250.

The repurchased shares of Series A Preferred Stock were simultaneously retired.

Refer to Note 16, "Equity and Mezzanine Equity – Hertz Global," and Note 18, "Public Warrants - Hertz Global," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for information on our equity financing arrangements.

Debt Financing

Refer to Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of December 31, 2021.

Cash paid for interest during 2021 was $198 million for interest on non-vehicle debt and $257 million for interest on vehicle debt.

Cash paid for interest during 2020 was $109 million for interest on non-vehicle debt and $335 million for interest on vehicle debt.

The $89 million increase in non-vehicle debt interest is primarily due to suspending interest payments on certain debt due to the filing of the Chapter 11 Cases.

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.

For a discussion of the risks associated with our high leverage, see Item 1A, "Risk Factors" in this 2021 Annual Report.

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

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

(In millions) As of December 31, 2021 As of December 31, 2020

Cash and cash equivalents $ 2,257 $ 1,096

Availability under the First Lien RCF 925 —

Corporate liquidity $ 3,182 $ 1,096

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

Significant financing activities during the year ended December 31, 2021 for our non-vehicle and vehicle debt were as follows:

Non-vehicle Debt

In accordance with the Plan of Reorganization, substantially all then-existing non-vehicle debt was repaid in full and cancelled on the Effective Date.

On and after the Effective Date, we entered into new credit agreements, as discussed below.

As of December 31, 2021, none of our non-vehicle debt is set to mature prior to 2026.

First Lien Credit Agreement

Pursuant to the Plan of Reorganization, on the Effective Date Hertz entered into the First Lien Credit Agreement that provides for the following:

• a term loan "B" facility (the "Term B Loan") for term loans in an aggregate principal amount of $1.3 billion;

• a term loan "C" facility (the "Term C Loan") for term loans that are available to cash collateralize letters of credit in an aggregate principal amount of $245 million;

• the First Lien RCF for revolving loans and letters of credit up to an aggregate principal amount of $1.3 billion.

Proceeds received under the First Lien Credit Agreement were used to (i) repay certain of our existing indebtedness;

(ii) pay fees, expenses and costs associated with the consummation of the Plan of Reorganization;

(iii) fund distributions required in connection with the Plan of Reorganization;

(iv) provide funds for working capital and general corporate purposes;

and (v) backstop letters of credit issued under the Term C Loan or replace existing letters of credit.

2021 Senior Notes

In November 2021, Hertz issued $1.5 billion of unsecured senior notes consisting of $500 million aggregate principal amount of 4.625% senior notes due December 2026 (the "Senior Notes Due 2026") and $1.0 billion aggregate principal amount of 5.000% senior notes due December 2029 (the "Senior Notes Due 2029").

The Senior Notes Due 2026 and the Senior Notes Due 2029 are our senior unsecured obligations and are guaranteed by each of Hertz’s direct and indirect U.S.

subsidiaries that are guarantors under the First Lien Credit Agreement.

Proceeds from the issuance of the Senior Notes Due 2026 and the Senior Notes Due 2029 were contributed to Hertz Global through a dividend distribution from Hertz to repurchase and retire all outstanding shares of Hertz Global's Series A Preferred Stock.

See Note 6, "Debt," and Note 16, "Equity and Mezzanine Equity – Hertz Global," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

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

Letters of Credit

On the Effective Date, in accordance with the Plan of Reorganization, drawn letters of credit under the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility were paid in full and terminated.

To the extent any of the related issued letters of credit remained outstanding as of the Effective Date, certain of these letters of credit were deemed to be issued under the First Lien RCF.

For the remainder, we provide cash collateral to backstop these obligations.

As of December 31, 2021, there were outstanding standby letters of credit totaling $591 million comprised primarily of $245 million issued under the Term C Loan and $330 million were issued under the First Lien RCF.

As of December 31, 2021, there is no remaining capacity to issue letters of credit under the Term C Loan.

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

As of December 31, 2021, none of the issued letters of credit have been drawn upon.

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

On the Effective Date, in accordance with the Plan of Reorganization, the then-existing HVF II notes and HVIF notes were paid in full and terminated.

Repayment proceeds originated from the new HVF III ABS Facility, as discussed below.

HVF III ABS Facility

On the Effective Date, Hertz Vehicle Financing III LLC ("HVF III"), a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, established a securitization platform, the HVF III ABS facility program, to facilitate the financing activities relating to vehicles used in our U.S.

daily vehicle rental operations.

This facility provided an aggregate principal amount of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion, as follows:

• HVF III Series 2021-A Notes with a maximum principal amount of up to $2.8 billion and a maturity date of June 2023;

• HVF III Series 2021-1 Notes with an aggregate principal amount of $2.0 billion;

• HVF III Series 2021-2 Notes with an aggregate principal amount of $2.0 billion.

On the Effective Date, proceeds received upon issuance from the HVF III Series 2021 Notes were used to fund the purchases of certain vehicles and for the repayment in full of (i) approximately $3.5 billion in aggregate outstanding principal of notes issued by HVF II and (ii) approximately $2.2 billion in aggregate outstanding principal of notes issued by HVIF.

The manufacturer rebates associated with HVF and HVIF were transferred to HVF III as part of the purchase agreements with HVF and HVIF.

Any remaining funds are expected to be used for the future purchase or refinancing of vehicles.

In December 2021, Hertz issued the Series 2021-A Class B Notes with a maximum principal amount of up to $188 million.

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

In January 2022, the Series 2022-1 Fixed Rate Rental Car Asset Backed Notes (the "Series 2022-1 Notes") and the Series 2022-2 Fixed Rate Rental Car Asset Backed Notes (the "Series 2022-2 Notes") were issued in an aggregate principal amount of $1.5 billion, of which $195 million were retained, as follows:

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

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

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

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

Proceeds from the issuance of the Series 2022-1 Notes and the Series 2022-2 Notes will be used to repay amounts outstanding on the Series 2021-A Notes.

Any remaining funds are expected to be used for the future purchase or refinancing of vehicles.

Approximately $190 million of the outstanding vehicle debt in our Americas RAC segment is scheduled to mature during the twelve months following the issuance of this 2021 Annual Report.

International RAC

In December 2021, the European ABS was amended to increase the aggregate maximum borrowings to €750 million and to extend the maturity to October 2023.

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

The First Lien Credit Agreement requires us to comply with the following financial covenant subsequent to the expiration of the Relief Period which expired effective as of September 30, 2021:

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

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

As of December 31, 2021, we were in compliance with the First Lien Ratio.

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

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, 2021, we were in compliance with all covenants in the First Lien Credit Agreement.

Vehicle Financing Risks

Our program vehicles are subject to repurchase by vehicle manufacturers under contractual repurchase or guaranteed depreciation programs.

Under these programs, vehicle manufacturers agree to repurchase vehicles at a specified price or guarantee the depreciation rate on the vehicles during a specified time period, typically subject to certain vehicle condition and mileage requirements.

We use values derived from this specified price or guaranteed depreciation rate to calculate financing capacity under certain asset-backed and asset-based financing arrangements.

In the event of a bankruptcy of a vehicle manufacturer, our liquidity could be impacted by several factors including reductions in fleet residual values and the risk that we would be unable to collect outstanding receivables due to us from such bankrupt manufacturer.

In addition, the program vehicles manufactured by any such company would

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

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.

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

and international vehicle rental fleets.

For further information concerning our asset-backed financing programs and our indebtedness, see Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." For a discussion of the risks associated with our reliance on asset-backed and asset-based financing and the significant amount of indebtedness, see Item 1A, "Risk Factors" in this 2021 Annual Report.

Capital Expenditures

Revenue Earning Vehicles Expenditures and Disposals

The table below sets forth our revenue earning vehicles expenditures and related disposal proceeds for the annual periods shown:

Cash inflow (cash outflow) Revenue Earning Vehicles

(In millions) Capital

Expenditures Disposal

Proceeds Net Capital Proceeds (Expenditures)

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

2020 (5,542) 10,098 4,556

2019 (13,714) 9,486 (4,228)

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

Cash inflow (cash outflow) Years Ended December 31, 2021 vs.

2020 2020 vs.

($ in millions) 2021 2020 2019 $ Change % Change $ Change % Change

Americas RAC segment $ (3,763) $ 3,903 $ (3,075) $ (7,666) NM $ 6,978 NM

International RAC segment (489) 929 (466) (1,418) NM 1,395 NM

All other operations (84) (276) (687) 192 (70) 411 (60)

Total $ (4,336) $ 4,556 $ (4,228) $ (8,892) NM $ 8,784 NM

NM - Not meaningful

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

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

Year ended December 31, 2020 compared with year ended December 31, 2019

In 2020, revenue earning vehicle cash flows increased by $8.8 billion, primarily in our Americas RAC segment, as we reduced our commitments to purchase vehicles due to the impact from COVID-19, partially offset by an increase of cash proceeds from disposals of revenue earning vehicles as we accelerated the disposition of vehicles due to the Interim Lease Order and the impact of COVID-19 on travel demand.

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

Non-Vehicle Capital Asset Expenditures and Disposals

The table below sets forth our non-vehicle capital asset expenditures, and related disposal proceeds from non-vehicle capital assets disposed of or to be disposed of for the annual periods shown:

Cash inflow (cash outflow) Non-Vehicle Capital Assets

(In millions) Capital

Expenditures Disposal

Proceeds Net Capital

2021 $ (71) $ 16 $ (55)

2020 (98) 60 (38)

2019 (224) 27 (197)

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

Cash inflow (cash outflow) Years Ended December 31, 2021 vs.

2020 2020 vs.

($ in millions) 2021 2020 2019 $ Change % Change $ Change % Change

Americas RAC segment $ (35) $ 3 $ (72) $ (38) NM $ 75 NM

International RAC segment (8) (4) (12) (4) 100 8 (67)

All other operations (1) (4) (4) 3 (75) — —

Corporate (11) (33) (109) 22 (67) 76 (70)

Total $ (55) $ (38) $ (197) $ (17) 45 $ 159 (81)

NM - Not meaningful

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

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

Year ended December 31, 2020 compared with year ended December 31, 2019

In 2020, net expenditures for non-vehicle capital assets decreased by $76 million in our corporate operations primarily due to a reduction in information technology and finance transformation program costs.

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

CONTRACTUAL OBLIGATIONS

The following table details our contractual cash obligations as of December 31, 2021:

Payments Due by Period

(In millions) Total 2022 2023 to 2024 2025 to 2026 After 2026

Debt obligation $ 7,954 $ 311 $ 5,643 $ 2,000 $ —

Interest on debt (1)

459 165 209 85 —

Debt obligation 3,055 20 35 526 2,474

Interest on debt (1)

1,007 157 296 296 258

Minimum fixed obligations for operating leases 2,536 390 616 377 1,153

Purchase obligations and other (2)

170 91 53 — 26

Total $ 15,181 $ 1,134 $ 6,852 $ 3,284 $ 3,911

(1) Amounts represent the estimated commitment fees and interest payments based on the principal amounts, minimum non-cancelable maturity dates and interest rates on the debt as of December 31, 2021.

See Note 6, "Debt," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" for further details.

(2) Represents agreements to purchase goods or services that are legally binding on us and that specify all significant terms, including fixed or minimum quantities;

fixed, minimum or variable price provisions;

and the approximate timing of the transaction, as well as liabilities for uncertain tax positions and other liabilities, and excludes any obligations to employees.

Only the minimum non-cancelable portion of purchase agreements and related cancellation penalties are included as obligations.

In the case of contracts that state minimum quantities of goods or services, amounts reflect only the stipulated minimums;

all other contracts reflect estimated amounts.

Purchase obligations include $26 million representing our tax liability for uncertain tax positions and related net accrued interest and penalties.

We have agreements with vehicle manufacturers to purchase vehicles over the next 12 months.

We expect purchases under these agreements to be approximately $5.7 billion, which will be financed primarily through the issuance of vehicle debt.

These purchases are subject to vehicle manufacturers satisfying their performance commitments under such agreements.

Additionally, the table excludes pension and other postretirement benefit obligations as disclosed in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

Indemnification Obligations

In the ordinary course of business, we execute contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business.

These indemnification obligations might include claims relating to the following:

environmental matters;

intellectual property rights;

governmental regulations and employment-related matters;

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

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

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

Environmental

We have indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages.

The amount of any such expenses or related natural resource damages for which we may be held responsible could be substantial.

The probable expenses that we expect to incur for such matters have been accrued, and those expenses are reflected in our consolidated financial statements within accrued liabilities.

Amounts accrued represent the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up activities, and the estimated cost to implement remediation actions, including on-going maintenance, as

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

Initial cost estimates are based on historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites.

For many sites, the remediation costs and other damages for which we ultimately may be responsible cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the materials there, the involvement of other potentially responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the technologies to be required and the extent, duration, and success of remediation).

EMPLOYEE RETIREMENT BENEFITS

We sponsor defined benefit pension plans worldwide.

Pension obligations give rise to expenses that are dependent on assumptions discussed in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Previously we sponsored the Hertz Corporation Benefit Equalization Plan and the Hertz Corporation Supplemental Executive Retirement Plans which were rejected by the Bankruptcy Court and terminated in connection with the Plan of Reorganization.

Our 2021 worldwide net periodic pension expense included in the accompanying consolidated statement of operations for the year ended December 31, 2021 is $7 million, which was comparable to 2020.

The funded status (i.e., the dollar amount by which the projected benefit obligations exceeded the market value of pension plan assets) of the Hertz Retirement Plan, as defined in Note 7, "Employee Retirement Benefits," to the Notes to our consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data," improved in December 31, 2021 compared with December 31, 2020 primarily due to actuarial gains resulting from increased discount rates.

We did not contribute to the Hertz Retirement Plan during 2021, and we do not anticipate contributing to the Hertz Retirement Plan during 2022.

For the international plans, we anticipate contributing $2 million during 2022.

The level of 2022 and future contributions will vary, and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations and the results of the final actuarial valuation.

We participate in several "multiemployer" pension plans.

We have accrued $20 million for benefit payments under our multiemployer pension plans which represents the net present value of the projected liabilities from withdrawal claims as of December 31, 2021.

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

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

Our multiemployer plans could have significant underfunded liabilities.

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

In addition, such underfunding may increase as a result of lower than expected returns on pension fund assets or other funding deficiencies.

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

For a discussion of the risks associated with our pension plans, see Item 1A, "Risk Factors” in this 2021 Annual Report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S.

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

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AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

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