What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-02-26 · 1278 added, 1522 removed, 1881 unchanged (60% of the section changed)

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Hertz Global Holdings, Inc.

and Subsidiaries (Debtor-in-Possession)

Reports of Independent Registered Public Accounting Firms

and Subsidiaries

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020

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Consolidated Statements of Comprehensive Income (Loss) for Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Changes in Equity for Years Ended December 31, 2020, 2019 and 2018

Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity for Years Ended December 31, 202 1 , 20 20 and 201 9

Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019

The Hertz Corporation and Subsidiaries (Debtor-in-Possession)

Reports of Independent Registered Public Accounting Firms

The Hertz Corporation and Subsidiaries

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020

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Consolidated Statements of Comprehensive Income (Loss) for Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Changes in Equity for Years Ended December 31, 2020, 2019 and 2018

Consolidated Statements of Changes in Stock holder's Equity (Deficit) for Years Ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for Years Ended December 31, 2021, 2020 and 2019

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Goodwill and Intangible Assets, Net

Revenue from Contracts with Customers

Employee Retirement Benefits

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Related Party Transactions

Equity and Earnings (Loss) Per Share - Hertz Global

Equity and Mezzanine Equity – Hertz Global

Earnings (Loss) Per Share – Hertz Global

Public Warrants - Hertz Global

Segment Information

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Reorganization Items, Net

Condensed Combined Debtor-in-Possession Financial Information

Condensed Financial Information of Registrant Hertz Global Holdings, Inc.

(Debtor-in-Possession)

Valuation and Qualifying Accounts

1 unchanged sentence

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

We have audited the accompanying consolidated balance sheets of Hertz Global Holdings, Inc.

and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in mezzanine equity and stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2021 expressed an adverse opinion thereon.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has filed for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Adoption of New Accounting Standard

As discussed in Note 10 to the consolidated financial statements the Company changed its method of accounting for leases as a result of the adoption of Accounting Standards Update (ASU) No.

2016-02, Leases (Topic 842), and the related amendments, effective January 1, 2019.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Calculation of Non-Program Depreciation on Revenue Earning Vehicles

Description of the Matter

For the year ended December 31, 2020, depreciation of revenue earning vehicles and lease charges was $2.032 billion, including gains and losses on disposals.

Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment

Description of the Matter For the year ended December 31, 2021, total depreciation of revenue earning vehicles and lease charges in the Americas RAC segment was $343 million, including gains and losses on disposals.

As discussed in Note 2 to the consolidated financial statements, depreciation rates are reviewed on a quarterly basis based on management’s ongoing assessment of present and estimated future market conditions, the effect of these conditions on residual values at the expected time of disposal and the estimated holding period for the revenue earning vehicles.

The Company’s fleet is comprised of vehicles that are subject to vehicle repurchase programs (“program vehicles”) and (“non-program vehicles”).

The Company’s fleet is comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).

For program vehicles, the manufacturers guarantee a specified price or depreciation rate upon disposal, versus non-program vehicles where the Company estimates the residual value of the vehicle at the expected time of disposal.

Auditing the Company’s calculation of depreciation for non-program vehicles was complex due to the significant estimation uncertainty and management judgment to determine the estimated residual values at the expected time of disposal.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

Auditing the Company’s calculation of depreciation for non-program vehicles related to the Americas RAC segment was complex due to the significant estimation uncertainty and management judgment to determine the estimated residual values at the expected time of disposal.

The significant estimation uncertainty was primarily due to management’s assumptions of future consumer demand for vehicles within their current fleet, the disposal channel of those vehicles and other external market conditions.

Additionally, auditing the calculation of depreciation was challenging due to the volume of data inputs utilized in management’s calculation, including historical sales data from multiple sources at varying levels of disaggregation along with additional data specific to the Company’s current fleet.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s measurement of depreciation expense for non-program vehicles.

For example, we tested controls over management’s quarterly review of the depreciation rates, which included their procedures to validate the completeness and accuracy of the data used in the calculation and their assessment of significant assumptions, specifically the estimated residual values of non-program vehicles.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s measurement of depreciation expense for non-program vehicles related to the Americas RAC segment.

To test the depreciation calculation for non-program vehicles, our audit procedures included, among others, testing the completeness and accuracy of the underlying data by comparing historical sales data and vehicle information used in the calculation (e.g., make, model, trim) to external sources and the Company’s records.

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Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Valuation of Self-insured Liabilities

Description of the Matter

As disclosed in Notes 2 and 15 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement, and worker's compensation.

Description of the Matter As disclosed in Notes 2 and 14 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement and worker's compensation.

The Company records liabilities for these matters based on actuarial analyses of historical claim activity and estimates of both reported accident claims not yet paid and claims incurred but not yet reported.

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The actuarial analyses that determine the claims incurred but not yet reported portion of the liability balances considers a variety of factors, including the frequency and severity of losses, changes in claim reporting and resolution patterns, insurance industry practices, the regulatory environment and legal precedent.

The adequacy of the liabilities is regularly monitored based on evolving accident claim history and insurance related state legislation changes.

If the Company’s estimates change or if actual results differ from these assumptions, the amount of the recorded liabilities are adjusted to reflect these results.

Auditing self-insured liabilities is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the estimate, management’s application of complex judgments and the use of actuarial methods.

In addition, the self-insured liabilities estimates are sensitive to management’s assumptions, including claim frequency, actuarial evaluations of historical claim experience and future projections of ultimate losses used in the computation of self-insured liabilities.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities process.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities process.

For example, we tested controls over management’s review of the assumptions outlined above that are used in the self-insured liabilities calculation and the completeness and accuracy of the data underlying the self-insured liabilities.

To test the valuation of the self-insured liabilities, we performed audit procedures that included, among others, testing the completeness and accuracy of the underlying claims data used to develop the related reserves.

Furthermore, we involved our internal actuarial specialists to assist us in evaluating the models used by management and the reasonableness of assumptions used in those models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).

We compared the Company's reserve to a range developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.

Valuation of Indefinite-Lived Intangible Tradename Assets and of Goodwill related to the U.S.

Rental Car Reporting Unit

Description of the Matter

As disclosed in Notes 1 and 5 to the consolidated financial statements, the Company’s indefinite-lived intangible tradename assets and goodwill related to its U.S.

rental car reporting unit (U.S.

RAC) totaled $2.794 billion and $1.029 billion, respectively, as of December 31, 2020.

As disclosed in Notes 1 and 5 to the consolidated financial statements, indefinite-lived intangible assets and goodwill are tested for impairment on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event.

The Company recorded an impairment of $20 million related to the Hertz tradename in the Company’s International RAC segment.

Auditing the Company’s indefinite-lived intangible tradename assets and goodwill related to the U.S.

RAC reporting unit was complex and highly judgmental due to the significant estimation required to determine the fair values of the indefinite-lived intangible tradename assets and the U.S.

RAC reporting unit as a result of the Company’s current operating performance and the current industry and economic environment in which the Company operates.

The Company’s estimate of fair value for the indefinite-lived intangible tradename assets and U.S.

RAC reporting unit required significant judgment to estimate the impact of declines in revenues and profitability, industry trends on future operating results, and the future cash flows expected to be generated.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Additionally, the fair value estimate of the U.S.

RAC reporting unit was sensitive to significant assumptions such as forecasted annual revenue growth rates, earnings before interest, taxes, depreciation, amortization (“EBITDA”) margins, and the weighted average cost of capital.

In addition, the fair value estimates of the indefinite-lived intangible tradename assets were sensitive to significant assumptions such as projected revenues, royalty rates, and discount rates.

These significant assumptions are affected by expected future market or economic conditions, including the impact of COVID-19.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s indefinite-lived intangible tradename assets and goodwill impairment review processes.

For example, we tested controls over management’s review of the assumptions, including assumptions related to projected financial information, as outlined above that are used in the indefinite-lived intangible tradename assets and goodwill impairment test.

To test the estimated fair value of the Company’s indefinite-lived intangible tradename assets and U.S.

RAC reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions and the completeness and accuracy of the underlying data used by the Company in its analyses.

To test the valuation of the self-insured liabilities, we performed audit procedures that included involving our internal actuarial specialists to assist us in developing an independent estimate of liability and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).

We compared the Company's reserve to the estimate of liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.

Valuation of Indefinite-Lived Intangible Tradename Assets in the International Rental Car (“RAC”) Segment

Description of the Matter As disclosed in Note 5 to the consolidated financial statements, the Company’s indefinite-lived intangible tradename assets totaled $2.794 billion, with $600 million relating to indefinite-lived intangible tradename assets in the International RAC segment, as of December 31, 2021.

As disclosed in Note 2 to the consolidated financial statements, indefinite-lived intangible assets are tested for impairment on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event.

Auditing the Company’s indefinite-lived intangible tradename assets in the International RAC segment was complex and highly judgmental due to the significant estimation required to determine its fair value as a result of the Company’s future projections, operating performance and the current industry and economic environment in which the Company operates.

The Company’s estimate of fair value for the indefinite-lived intangible tradename assets in the International RAC segment required significant judgment to estimate the impact of changes in revenues and profitability, industry trends on future operating results and the future cash flows expected to be generated.

In addition, the fair value estimate of these indefinite-lived intangible tradename assets in the International RAC segment was sensitive to significant assumptions such as projected revenues, royalty rates, terminal period revenue growth rates and the weighted average cost of capital.

These significant assumptions are affected by expected future market or economic conditions, including the continuing impact of COVID-19 and the Chip Shortage as defined in the Company’s Form 10-K.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s indefinite-lived intangible tradename assets impairment review processes.

To test the estimated fair value of the International RAC segment’s indefinite-lived intangible tradename assets, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions and the completeness and accuracy of the underlying data used by the Company in its analyses.

We compared the significant assumptions used by management to current industry and economic trends, expected changes to the Company’s business model, the Company’s historical results and other relevant factors.

We assessed the historical accuracy of management’s estimates, including projected financial information, and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the indefinite-lived intangible tradename assets and U.S.

RAC reporting unit that would result from hypothetical changes in the assumptions.

We also involved valuation specialists to assist in our evaluation of the Company’s model, valuation methodologies, and certain significant assumptions, such as the royalty rates and weighted average cost of capital.

In addition, we inspected the Company’s reconciliation of the fair value of all reporting units to the market capitalization of the Company and assessed the results.

We assessed the historical accuracy of management’s estimates, including projected financial information, and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the International RAC segment indefinite-lived intangible tradename assets that would result from hypothetical changes in the assumptions.

/s/ Ernst & Young LLP

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AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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and subsidiaries’ internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Hertz Global Holdings, Inc.

and subsidiaries (the Company) have not maintained effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management's assessment.

Management has identified a material weakness in controls related to information technology general controls (ITGCs) whereby the Company did not maintain effective ITGCs, specifically logical security controls over financially significant system applications.

The ineffective logical security controls included user provisioning and de-provisioning and user and privileged access reviews.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2020 consolidated financial statements, and this report does not affect our report dated February 26, 2021 which expressed an unqualified opinion thereon that included an explanatory paragraph regarding the Company’s ability to continue as a going concern.

In our opinion, Hertz Global Holdings, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in mezzanine equity and stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 23, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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February 23, 2022

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Hertz Global Holdings, Inc.

Opinion on the Financial Statements

We have audited the consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows of Hertz Global Holdings, Inc.

and its subsidiaries (the “Company”) for the year ended December 31, 2018 including the related notes and schedules of (i) condensed financial information of Hertz Global Holdings, Inc.

for the year ended December 31, 2018 and (ii) valuation and qualifying accounts for the year ended December 31, 2018 appearing under Item 8 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues in 2018.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

February 25, 2019, except for the effects of the rights offering discussed in Note 17 and the changes to segment information disclosed in Note 18, as to which the date is February 25, 2020.

We served as the Company's auditor from 1994 to 2019.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Hertz Corporation and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of The Hertz Corporation and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in stockholder’s equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

generally accepted accounting principles.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Adoption of New Accounting Standard

As discussed in Note 10 to the consolidated financial statements the Company changed its method of accounting for leases as a result of the adoption of Accounting Standards Update (ASU) No.

2016-02, Leases (Topic 842), and the related amendments, effective January 1, 2019.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Critical Audit Matters

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

Calculation of Non-Program Depreciation on Revenue Earning Vehicles

Description of the Matter

For the year ended December 31, 2020, depreciation of revenue earning vehicles and lease charges was $2.032 billion, including gains and losses on disposals.

Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment

The Company’s fleet is comprised of vehicles that are subject to vehicle repurchase programs (“program vehicles”) and (“non-program vehicles”).

The Company’s fleet is comprised of vehicles that are subject to and are not subject to vehicle repurchase programs (“program vehicles” and “non-program vehicles,” respectively).

THE HERTZ CORPORATION AND SUBSIDIARIES

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s measurement of depreciation expense for non-program vehicles.

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Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

Valuation of Self-insured Liabilities

Description of the Matter

1 unchanged sentence

The adequacy of the liabilities is regularly monitored based on evolving accident claim history and insurance related state legislation changes.

If the Company’s estimates change or if actual results differ from these assumptions, the amount of the recorded liabilities are adjusted to reflect these results.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities process.

We compared the Company's reserve to a range developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.

Valuation of Indefinite-Lived Intangible Tradename Assets and of Goodwill related to the U.S.

Rental Car Reporting Unit

Description of the Matter

As disclosed in Notes 1 and 5 to the consolidated financial statements, the Company’s indefinite-lived intangible tradename assets and goodwill related to its U.S.

rental car reporting unit (U.S.

RAC) totaled $2.794 billion and $1.029 billion, respectively, as of December 31, 2020.

The Company recorded an impairment of $20 million related to the Hertz tradename in the Company’s International RAC segment.

Auditing the Company’s indefinite-lived intangible tradename assets and goodwill related to the U.S.

RAC reporting unit was complex and highly judgmental due to the significant estimation required to determine the fair values of the indefinite-lived intangible tradename assets and the U.S.

RAC reporting unit as a result of the Company’s current operating performance and the current industry and economic environment in which the Company operates.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

The Company’s estimate of fair value for the indefinite-lived intangible tradename assets and U.S.

Additionally, the fair value estimate of the U.S.

In addition, the fair value estimates of the indefinite-lived intangible tradename assets were sensitive to significant assumptions such as projected revenues, royalty rates, and discount rates.

These significant assumptions are affected by expected future market or economic conditions, including the impact of COVID-19.

How We Addressed the Matter in Our Audit

To test the estimated fair value of the Company’s indefinite-lived intangible tradename assets and U.S.

We compared the Company's reserve to the estimate of liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.

Valuation of Indefinite-Lived Intangible Tradename Assets in the International Rental Car (“RAC”) Segment

These significant assumptions are affected by expected future market or economic conditions, including the continuing impact of COVID-19 and the Chip Shortage as defined in the Company’s Form 10-K.

RAC reporting unit that would result from hypothetical changes in the assumptions.

We also involved valuation specialists to assist in our evaluation of the Company’s model, valuation methodologies, and certain significant assumptions, such as royalty rates and weighted average cost of capital.

In addition, we inspected the Company’s reconciliation of the fair value of all reporting units to the market capitalization of the Company and assessed the results.

We assessed the historical accuracy of management’s estimates, including projected financial information, and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the International RAC segment indefinite-lived intangible tradename assets that would result from hypothetical changes in the assumptions.

/s/ Ernst & Young LLP

3 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2 unchanged sentences

We have audited The Hertz Corporation and subsidiaries’ internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, The Hertz Corporation and subsidiaries (the Company) have not maintained effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

The following material weakness has been identified and included in management's assessment.

The ineffective logical security controls included user provisioning and de-provisioning and user and privileged access reviews.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, The Hertz Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), changes in stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 23, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

8 unchanged sentences

(2) provide reasonable

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

4 unchanged sentences

February 23, 2022

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

The Hertz Corporation

Opinion on the Financial Statements

We have audited the consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows of The Hertz Corporation and its subsidiaries (the “Company”) for the year ended December 31, 2018 including the related notes and schedule of valuation and qualifying accounts for the year ended December 31, 2018 appearing under Item 8 (collectively referred to as the “consolidated financial statements”).

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues in 2018.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Fort Lauderdale, Florida

February 25, 2019, except for the effects of the changes to segment information disclosed in Note 18, as to which the date is February 25, 2020.

We served as the Company's auditor from 1994 to 2019.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED BALANCE SHEETS

32 unchanged sentences

Total debt 10,907 6,267

Public Warrants 1,324 —

Operating lease liabilities 1,510 1,636

10 unchanged sentences

Common stock, $ 0.01 par value, 477,233,278 and 158,235,410 shares issued, respectively, and 449,782,424 and 156,206,478 shares outstanding, respectively

Treasury stock, at cost, 27,450,854 and 2,028,932 common shares, respectively

( 708 ) ( 100 )

Additional paid-in capital 6,209 3,047

Accumulated deficit ( 2,681 ) ( 967 )

Retained earnings (Accumulated deficit) ( 2,315 ) ( 2,681 )

Accumulated other comprehensive income (loss) ( 214 ) ( 212 )

Treasury stock, at cost, 2,028,932 and 2,028,932 shares, respectively

( 100 ) ( 100 )

Stockholders' equity attributable to Hertz Global 2,977 56

2 unchanged sentences

Total liabilities and stockholders' equity $ 19,783 $ 16,908

(1) Hertz Global Holdings, Inc.'s consolidated total assets as of December 31, 2020 and December 31, 2019 include total assets of VIEs of $ 511 million and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.

Hertz Global Holdings, Inc.'s consolidated total liabilities as of December 31, 2020 and December 31, 2019 include total liabilities of VIEs of $ 475 million and $ 1.1 billion, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc.

See "Special Purpose Entities" in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 16, "Related Party Transactions," for further information.

(1) Hertz Global Holdings, Inc.'s consolidated total assets as of December 31, 2021 and December 31, 2020 included total assets of variable interest entities ("VIEs") of $ 734 million and $ 511 million, respectively, which can only be used to settle obligations of the VIEs.

Hertz Global Holdings, Inc.'s consolidated total liabilities as of December 31, 2021 and December 31, 2020 included total liabilities of VIEs of $ 733 million and $ 475 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc.

See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF OPERATIONS

2 unchanged sentences

2021 2020 2019

Worldwide vehicle rental $ 4,628 $ 9,107 $ 8,756

All other operations 630 672 748

Total revenues 5,258 9,779 9,504

Revenues $ 7,336 $ 5,258 $ 9,779

Direct vehicle and operating 3,920 3,423 5,305

1 unchanged sentence

497 2,030 2,563

Non-vehicle depreciation and amortization 196 225 203

Selling, general and administrative 688 645 949

3 unchanged sentences

Total interest expense, net 469 608 805

Intangible and other asset impairments 213 — —

Technology-related intangible and other asset impairments — 213 —

Other (income) expense, net ( 21 ) ( 9 ) ( 59 )

Reorganization items, net 677 175 —

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

Change in fair value of Public Warrants 627 — —

Total expenses 6,653 7,310 9,766

5 unchanged sentences

Net income (loss) attributable to Hertz Global 366 ( 1,714 ) ( 58 )

Weighted-average shares outstanding:

Series A Preferred Stock deemed dividends ( 450 ) — —

Net income (loss) available to Hertz Global common stockholders $ ( 84 ) $ ( 1,714 ) $ ( 58 )

Weighted-average common shares outstanding:

Basic 315 150 117

Diluted 315 150 117

Earnings (loss) per share:

Basic earnings (loss) per share $ ( 11.44 ) $ ( 0.49 ) $ ( 2.35 )

Diluted earnings (loss) per share

$ ( 11.44 ) $ ( 0.49 ) $ ( 2.35 )

Earnings (loss) per common share:

Basic $ ( 0.27 ) $ ( 11.44 ) $ ( 0.49 )

Diluted $ ( 0.27 ) $ ( 11.44 ) $ ( 0.49 )

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

6 unchanged sentences

( 36 ) ( 19 ) 6

Reclassification of foreign currency items to other (income) expense, net

Net gain (loss) on pension and postretirement benefit plans 25 ( 11 ) ( 11 )

6 unchanged sentences

Total comprehensive income (loss) 363 ( 1,746 ) ( 47 )

( 1,746 ) ( 47 ) ( 290 )

Comprehensive (income) loss attributable to noncontrolling interests 1 9 ( 8 )

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AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

(In millions)

Preferred Stock Shares Common Stock Shares Common Stock Amount Additional

Paid-In Capital Accumulated

Mezzanine Equity

Preferred Stock Shares Preferred Stock Amount Common Stock Shares Common Stock Amount Additional

Paid-In Capital Retained Earnings (Accumulated

Deficit) Accumulated

4 unchanged sentences

December 31, 2018 — $ — 84 $ 1 $ 2,261 $ ( 909 ) $ ( 192 ) 2 $ ( 100 ) $ 1,061 $ 59 $ 1,120

Change in accounting principle — — — — ( 189 ) — — — ( 189 ) — ( 189 )

January 1, 2018 (as adjusted) — 84 1 2,243 ( 695 ) ( 118 ) 2 ( 100 ) 1,331 — 1,331

Net income (loss) — — — — — ( 58 ) — — — ( 58 ) 8 ( 50 )

2 unchanged sentences

Stock-based compensation charges — — — — 18 — — — — 18 — 18

Reclassification of income tax effects resulting from the Tax Cuts and Jobs Act — — — — 11 ( 11 ) — — — — —

2019 Rights Offering, net — — 58 — 748 — — — — 748 — 748

Contributions from noncontrolling interests — — — — — — — — — — 52 52

4 unchanged sentences

Stock-based compensation charges — — — — ( 2 ) — — — — ( 2 ) — ( 2 )

Rights Offering, net — 58 — 748 — — — — 748 — 748

Contributions from noncontrolling interests — — — — — — — — — 52 52

ATM Program, net — — 14 1 28 — — — — 29 — 29

Distributions to noncontrolling interests, net — — — — — — — — — — ( 73 ) ( 73 )

December 31, 2020 — — 156 2 3,047 ( 2,681 ) ( 212 ) 2 ( 100 ) 56 37 93

1 unchanged sentence

Other comprehensive income (loss) — — — — — — ( 2 ) — — ( 2 ) — ( 2 )

Net settlement on vesting of restricted stock — — — ( 3 ) — — — — ( 3 ) — ( 3 )

Stock-based compensation charges — — — — 10 — — — — 10 — 10

Stock issuance, net — 14 1 28 — — — — 29 — 29

Distributions to noncontrolling interests, net — — — — — — — — — ( 73 ) ( 73 )

Cancellation of stock-based awards — — — — ( 10 ) — — — — ( 10 ) — ( 10 )

Cancellation of common and treasury shares in exchange for new common shares — — ( 142 ) ( 2 ) ( 98 ) — — ( 2 ) 100 — — —

Distributions to common stockholders — — — — ( 239 ) — — — — ( 239 ) — ( 239 )

Contributions from Plan Sponsors — — 277 3 2,778 — — — — 2,781 — 2,781

2021 Rights Offering, net — — 181 2 1,800 — — — — 1,802 — 1,802

Public Warrant issuance — — — — ( 800 ) — — — — ( 800 ) — ( 800 )

Preferred stock issuance, net 2 1,433 — — — — — — — 1,433 — 1,433

Repurchase of preferred stock, net ( 2 ) ( 1,433 ) — — ( 450 ) — — — — ( 1,883 ) — ( 1,883 )

Public Warrant exercises (1)

— — 5 — 180 — — — — 180 — 180

Nasdaq listing and share repurchases (2)

— — ( 27 ) — ( 9 ) — — 27 ( 708 ) ( 717 ) — ( 717 )

Distributions to noncontrolling interests (3)

— — — — — — — — — — ( 36 ) ( 36 )

December 31, 2021 — $ — 450 $ 5 $ 6,209 $ ( 2,315 ) $ ( 214 ) 27 $ ( 708 ) $ 2,977 $ — $ 2,977

The accompanying notes are an integral part of these financial statements.

(1) The amounts presented herein may be rounded to agree to amounts in the audited consolidated balance sheet.

Also see Note 18, "Public Warrants - Hertz Global."

(2) See Registration Status of Stock Issued on the Effective Date and Nasdaq Listing and Share Repurchase Program for Common Stock in Note 16, "Equity and Mezzanine Equity – Hertz Global."

(3) Effective October 31, 2021, the 767 lease agreement was terminated.

See Note 3, "Divestitures."

The accompanying notes are an integral part of these financial statements.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

12 unchanged sentences

Deferred income taxes, net 270 ( 353 ) 27

Intangible and other asset impairments 213 — —

Technology-related intangible and other asset impairments — 213 —

Reorganization items, net 314 8 —

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

(Gain) loss on marketable securities — — ( 30 )

(Gain) loss on sale of non-vehicle capital assets ( 8 ) ( 24 ) ( 39 )

Change in fair value of Public Warrants 627 — —

Other ( 5 ) 5 ( 9 )

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Proceeds from non-vehicle capital assets disposed of or to be disposed of 16 60 27

Purchases of marketable securities — — ( 60 )

Sales of marketable securities — 74 —

Collateral payments ( 303 ) — —

Collateral returned in exchange for letters of credit 280 — —

Proceeds from the sale of a business, net of cash sold 871 — —

Other ( 1 ) ( 1 ) —

4 unchanged sentences

Proceeds from issuance of non-vehicle debt 4,644 1,812 3,016

Repayments of non-vehicle debt ( 855 ) ( 3,732 ) ( 571 )

Payment of financing costs ( 75 ) ( 53 ) ( 47 )

Early redemption premium payment — ( 34 ) ( 19 )

Proceeds from issuance of stock, net 28 — —

Contributions from (distributions to) noncontrolling interests ( 75 ) 49 60

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

2 unchanged sentences

2021 2020 2019

Proceeds from Rights Offering, net — 748 —

Repayments of non-vehicle debt ( 6,352 ) ( 855 ) ( 3,732 )

Payment of financing costs ( 185 ) ( 75 ) ( 53 )

Proceeds from Plan Sponsors 2,781 — —

Early redemption premium payment ( 85 ) — ( 34 )

Proceeds from issuance of common stock, net — 28 —

Proceeds from exercises of Public Warrants 77 — —

Proceeds from the issuance of preferred stock, net 1,433 — —

Distributions to common stockholders ( 239 ) — —

Contributions from (distributions to) noncontrolling interests ( 38 ) ( 75 ) 49

Proceeds from rights offerings, net 1,639 — 748

Share repurchases ( 654 ) — —

Repurchase of preferred stock ( 1,883 ) — —

Payments for Nasdaq listing costs ( 9 ) — —

Other — ( 2 ) ( 3 )

3 unchanged sentences

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period (1)

1,578 1,360 1,410

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period (1)

10 unchanged sentences

Sales of revenue earning vehicles included in vehicle receivables 33 144 667

Sales-type capital lease of revenue earning vehicles included in other receivables — — 75

Fleet payables included in liabilities subject to compromise — 2 —

3 unchanged sentences

Operating lease right-of-use assets obtained in exchange for lease liabilities 177 152 680

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which are held for sale as disclosed in Note 3, "Divestitures."

Public Warrant issuance 800 — —

Public Warrant exercises 103 — —

Backstop equity issuance 164 — —

Accrual for purchases of treasury shares 54 — —

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale as of December 31, 2020, prior to the completion of the Donlen Sale in the first quarter of 2021, as described in Note 3 , " Divestitures."

The accompanying notes are an integral part of these financial statements.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED BALANCE SHEETS

42 unchanged sentences

Commitments and contingencies

Stockholder's equity:

Common stock, $ 0.01 par value, 3,000 shares authorized, 100 and 100 shares issued and outstanding, respectively

Stockholder's equity (deficit):

Common stock, $ 0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding

Additional paid-in capital 7,190 3,953

Due from affiliate — ( 64 )

Accumulated deficit ( 3,783 ) ( 1,937 )

Retained earnings (Accumulated deficit) ( 2,626 ) ( 3,783 )

Accumulated other comprehensive income (loss) ( 214 ) ( 212 )

3 unchanged sentences

Total liabilities and stockholder's equity (deficit) $ 19,780 $ 16,880

(1) The Hertz Corporation's consolidated total assets as of December 31, 2020 and December 31, 2019 include total assets of VIEs of $ 511 million and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.

The Hertz Corporation's consolidated total liabilities as of December 31, 2020 and December 31, 2019 include total liabilities of VIEs of $ 475 million and $ 1.1 billion, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation.

See "Special Purpose Entities" in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 16, "Related Party Transactions," for further information.

(1) The Hertz Corporation's consolidated total assets as of December 31, 2021 and December 31, 2020 included total assets of VIEs of $ 734 million and $ 511 million, respectively, which can only be used to settle obligations of the VIEs.

The Hertz Corporation's consolidated total liabilities as of December 31, 2021 and December 31, 2020 included total liabilities of VIEs of $ 733 million and $ 475 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation.

See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.

The accompanying notes are an integral part of these financial statements.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF OPERATIONS

2 unchanged sentences

2021 2020 2019

Worldwide vehicle rental $ 4,628 $ 9,107 $ 8,756

All other operations 630 672 748

Total revenues 5,258 9,779 9,504

Revenues $ 7,336 $ 5,258 $ 9,779

Direct vehicle and operating 3,920 3,423 5,305

1 unchanged sentence

497 2,030 2,563

Non-vehicle depreciation and amortization 196 225 203

Selling, general and administrative 688 645 949

3 unchanged sentences

Total interest expense, net 469 606 798

Intangible and other asset impairments 213 — —

Technology-related intangible and other asset impairments — 213 —

Write-off of intercompany loan — 133 —

1 unchanged sentence

Reorganization items, net 513 175 —

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

Total expenses 5,862 7,441 9,759

8 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

6 unchanged sentences

( 36 ) ( 19 ) 6

Reclassification of foreign currency items to other (income) expense, net

Net gain (loss) on pension and postretirement benefit plans 25 ( 11 ) ( 11 )

10 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)

(In millions)

6 unchanged sentences

December 31, 2018 100 — 3,187 ( 52 ) ( 1,884 ) ( 192 ) 1,059 59 1,118

Change in accounting principle

— — — — ( 189 ) — ( 189 ) — ( 189 )

January 1, 2018 (as adjusted) 100 — 3,166 ( 42 ) ( 1,675 ) ( 118 ) 1,331 — 1,331

Net income (loss) — — — — ( 53 ) — ( 53 ) 8 ( 45 )

— — — — ( 220 ) — ( 220 ) ( 2 ) ( 222 )

Due from Hertz Holdings

— — — ( 10 ) — — ( 10 ) — ( 10 )

Other comprehensive income (loss) — — — — — 3 3 — 3

— — — — — ( 63 ) ( 63 ) — ( 63 )

Reclassification of income tax effects resulting from the Tax Cuts and Jobs Act

— — — — 11 ( 11 ) — — —

Stock-based compensation charges

— — 21 — — — 21 — 21

— — — — — — — 61 61

December 31, 2018 100 — 3,187 ( 52 ) ( 1,884 ) ( 192 ) 1,059 59 1,118

Net income (loss)

— — — — ( 53 ) — ( 53 ) 8 ( 45 )

Due from Hertz Holdings — — — ( 12 ) — — ( 12 ) — ( 12 )

— — — ( 12 ) — — ( 12 ) — ( 12 )

Other comprehensive income (loss)

— — — — — 3 3 — 3

Stock-based compensation charges — — 18 — — — 18 — 18

— — 18 — — — 18 — 18

Contributions from noncontrolling interests

— — — — — — — 52 52

Contributions from Hertz Holdings — — 750 — — — 750 — 750

Contributions from noncontrolling interests — — — — — — — 52 52

December 31, 2019 100 — 3,955 ( 64 ) ( 1,937 ) ( 189 ) 1,765 119 1,884

Net income (loss) — — — — ( 1,846 ) — ( 1,846 ) ( 9 ) ( 1,855 )

Other comprehensive income (loss) — — — — — ( 23 ) ( 23 ) — ( 23 )

Due from Hertz Holdings — — — ( 4 ) — — ( 4 ) — ( 4 )

3 unchanged sentences

— — — 133 — — 133 — 133

Other comprehensive income (loss) — — — — — ( 23 ) ( 23 ) — ( 23 )

Stock-based compensation charges — — ( 2 ) — — — ( 2 ) — ( 2 )

1 unchanged sentence

December 31, 2020 100 — 3,953 — ( 3,783 ) ( 212 ) ( 42 ) 37 ( 5 )

(1) As a result of the Chapter 11 Cases, a Pre-petition loan due to an affiliate was classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

See Note 19, "Liabilities Subject to Compromise."

(2) As a result of the filing of the Chapter 11 Cases, the full amount outstanding under a loan due from affiliate was deemed uncollectible and written off.

Net income (loss) — — — — 1,157 — 1,157 ( 1 ) 1,156

Other comprehensive income (loss) — — — — — ( 2 ) ( 2 ) — ( 2 )

Non-cash distribution (1)

— — 65 — — — 65 — 65

Stock-based compensation charges — — 10 — — — 10 — 10

Cancellation of stock-based awards — — ( 10 ) — — — ( 10 ) — ( 10 )

Contributions from Hertz Holdings — — 5,642 — — — 5,642 — 5,642

Dividends to Hertz Holdings — — ( 2,470 ) — — — ( 2,470 ) — ( 2,470 )

Distributions to noncontrolling interests (2)

— — — — — — — ( 36 ) ( 36 )

December 31, 2021 100 $ — $ 7,190 $ — $ ( 2,626 ) $ ( 214 ) $ 4,350 $ — $ 4,350

(1) See Note 15, "Related Party Transactions."

(2) Effective October 31, 2021, the 767 lease agreement was terminated.

See Note 3, "Divestitures."

The accompanying notes are an integral part of these financial statements.

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

12 unchanged sentences

Deferred income taxes, net 270 ( 353 ) 28

Intangible and other asset impairments 213 — —

Technology-related intangible and other asset impairments — 213 —

Write-off of intercompany loan — 133 —

Reorganization items, net 150 8 —

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

(Gain) loss on marketable securities — — ( 30 )

16 unchanged sentences

Proceeds from non-vehicle capital assets disposed of or to be disposed of 16 60 27

Purchases of marketable securities — — ( 60 )

Sales of marketable securities — 74 —

Collateral payments ( 303 ) — —

Collateral returned in exchange for letters of credit 280 — —

Proceeds from the sale of a business, net of cash sold 871 — —

Other ( 1 ) ( 1 ) —

3 unchanged sentences

Repayments of vehicle debt ( 12,607 ) ( 10,751 ) ( 11,530 )

Proceeds from issuance of non-vehicle debt 4,644 1,812 3,016

Repayments of non-vehicle debt ( 6,352 ) ( 855 ) ( 3,732 )

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

2 unchanged sentences

2021 2020 2019

Proceeds from issuance of non-vehicle debt 1,812 3,016 557

Repayments of non-vehicle debt ( 855 ) ( 3,732 ) ( 571 )

Payment of financing costs ( 185 ) ( 75 ) ( 53 )

2 unchanged sentences

Contributions from (distributions to) noncontrolling interests ( 38 ) ( 75 ) 49

Dividends paid to Hertz Holdings ( 2,470 ) — —

Contributions from Hertz Holdings 5,642 — 750

3 unchanged sentences

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period (1)

1,550 1,360 1,410

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period (1)

10 unchanged sentences

Sales of revenue earning vehicles included in vehicle receivables 33 144 667

Sales-type capital lease of revenue earning vehicles included in other receivables — — 75

Fleet payables included in liabilities subject to compromise — 2 —

3 unchanged sentences

Operating lease right-of-use assets obtained in exchange for lease liabilities 177 152 680

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which are held for sale as disclosed in Note 3, "Divestitures."

Non-cash capital contribution from Hertz Holdings 65 — —

The accompanying notes are an integral part of these financial statements.

2 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-owned, licensee and franchisee locations in the U.S., Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand.

Through its Donlen subsidiary, Hertz provides vehicle leasing and fleet management services.

As disclosed in Note 3, "Divestitures," in the fourth quarter of 2020, the Company entered into a stock and asset purchase agreement to sell the Donlen Assets.

Unless otherwise noted, information disclosed in these notes to the consolidated financial statements exclude the Donlen Assets.

The Company also sells vehicles through Hertz Car Sales and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets.

As disclosed in Note 3, "Divestitures," on March 30, 2021 the Company completed the Donlen Sale, a business which provided vehicle leasing and fleet management services.

Chapter 11 and Emergence

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

In response to COVID-19, local and national governments around the world instituted shelter-in-place and similar orders and travel restrictions, and airline and other travel decreased suddenly and dramatically.

Despite a strong start to the year, as a result of the impact on travel demand, late in the first quarter, the Company began experiencing a high level of rental cancellations and a significant decline in forward bookings.

In response, the Company began adjusting its fleet levels to reflect the reduced level of demand by leveraging its multiple used-vehicle channels and negotiating with suppliers to reduce fleet commitments.

Additionally, the Company began aggressively managing costs, including implementing employee furlough programs affecting approximately 20,000 employees worldwide to align staffing levels with the slowdown in demand.

The Company (i) initiated a restructuring program affecting approximately 11,000 employees in its U.S.

RAC segment and U.S.

corporate operations, the majority of which were previously furloughed;

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

(iii) substantially reduced capital expenditures;

(iv) eliminated discretionary marketing spend;

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

See Note 11, "Restructuring" for further information regarding the restructuring program disclosed above.

Although the Company had taken aggressive action to eliminate costs, it faced significant ongoing expenses, including monthly payments under its Operating Lease with HVF, pursuant to which Hertz leases from HVF vehicles used in the Company's U.S.

rental car operations.

HVF II issues asset-backed notes and lends the proceeds thereof to HVF to finance the acquisition of vehicles, which are then leased to Hertz pursuant to the Operating Lease.

Monthly payments under the Operating Lease are variable and significant and are subject to volatility depending upon the changes in current market value estimates of the underlying leased vehicles.

During April 2020, the Company engaged in discussions with various creditors to obtain relief from its obligations to make full rent payments under its Operating Lease.

While such discussions were ongoing, to preserve liquidity, on April 27, 2020, Hertz did not make certain payments, including the full rent payments, in accordance with the Operating Lease.

As a result of the failure to make the full rent payments on April 27, 2020, 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 variable funding notes (“Series 2013-A Notes”) issued by HVF II.

As a result of the amortization event, and notwithstanding the forbearance agreement described below, proceeds from the sales of vehicles that collateralize the notes issued by HVF II were to be primarily applied to the payment of principal and interest under those notes and were not available to finance new vehicle acquisitions for Hertz.

A liquidation event means that, unless the affected noteholders otherwise agree, the affected noteholders can direct the liquidation of vehicles serving as collateral for their notes.

On May 4, 2020, prior to the occurrence of the liquidation event with respect to the Series 2013-A Notes, Hertz, HVF, HVF II and DTG Operations, Inc.

entered into a forbearance agreement (the “Forbearance Agreement”) with holders (the “VFN Noteholders”) of the Series 2013-A Notes representing approximately 77 % in aggregate principal amount of the Series 2013-A Notes.

Pursuant to the Forbearance Agreement that became effective against all VFN

Noteholders, the VFN Noteholders agreed to forbear from exercising their liquidation remedies.

The Forbearance Agreement with the VFN Noteholders expired on May 22, 2020.

Concurrently with entering into the Forbearance Agreement, on May 4, 2020, Hertz entered into limited waiver agreements (collectively, the “Waiver Agreements”) with certain of the lenders (the “Lenders”) under its (i) Senior RCF/senior term loan facility, (ii) letter of credit facility, (iii) alternative letter of credit facility and (iv) U.S.

Vehicle RCF (collectively, the “Facilities”).

Pursuant to the Waiver Agreements, the Lenders agreed to (a) waive any default or event of default that could have resulted from the above referenced missed payment under the Operating Lease, (b) waive any default or event of default that had arisen as a result of Hertz’s failure to deliver its 2020 operating budget on a timely basis in accordance with the Facilities and (c) extend the grace period to cure a default with respect to Hertz’s obligation to reimburse drawings that occurred under certain letters of credit during the waiver period.

The Waiver Agreements which were effective across the Facilities expired on May 22, 2020.

In accordance with the Forbearance Agreement and the Waiver Agreements, the Company made a payment of approximately $ 30 million reflecting certain variable payment elements of monthly rent under the Operating Lease, including an interest component on May 5, 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.

As a result of the impact of COVID-19 and the associated government responses on travel demand, late in the first quarter of 2020, the Company experienced a high level of rental cancellations and a significant decline in forward bookings.

In response, the Company began aggressive actions to eliminate costs.

However, it faced significant ongoing expenses, including a large lease payment with respect to its vehicle fleet that increased as a result of COVID-19's impact on the car market.

On the Petition Date, the Debtors filed petitions for relief 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) .

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 the Company’s operations, customers and employees.

The Debtors are authorized to conduct their 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.

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 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 are reimbursable by the Debtors;

and (iv) suspended 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 from June 1, 2020 through December 31, 2020, the Company disposed of approximately 198,000 lease vehicles pursuant to or otherwise in satisfaction of its vehicle disposition obligations under the Interim Lease Order.

In 2020, the Bankruptcy Court entered the Lease Rejection Orders which applied, in the aggregate, to 359 off airport and 66 airport locations in the Company's U.S.

See Note 10, "Leases" for further information.

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 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.

While in Chapter 11, the Debtors operated as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In general, as debtors-in-possession under the Bankruptcy Code, the Debtors were authorized to continue to operate as an ongoing business but could not engage in transactions outside the ordinary course of 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 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, the reorganized Company received cash proceeds of $ 7.5 billion comprised of:

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

• $ 1.6 billion from the purchase of common stock in reorganized Hertz Global 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 the Company's secured exit term loan facilities (the "Term Loans").

Such cash proceeds were used, in part, to provide payments to the Company's 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 Company's DIP Credit Agreement received payment in cash in full;

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Debtors-In-Possession

The Debtors are currently operating as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

Automatic Stay

Subject to certain specific exceptions under the Bankruptcy Code, the Debtors' bankruptcy petitions automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to obligations of the Debtors incurred prior to the Petition Date.

Substantially all of the Debtors’ Pre-petition liabilities are subject to resolution as provided in the Bankruptcy Code.

Potential Claims

The Debtors have filed with the Bankruptcy Court schedules and statements setting forth, among other things, the assets and liabilities of each of the Debtors, subject to the assumptions filed in connection therewith.

These schedules and statements may be subject to further amendment or modification after filing.

As part of the Chapter 11 Cases, parties believing that they have claims or causes of action against the Debtors may file proofs of claim evidencing such claims.

Certain holders of Pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims, which was on October 21, 2020, the Bar Date.

As of December 31, 2020, the Debtors have received approximately 14,600 proofs of claim in the aggregate asserted amount of approximately $ 104.5 billion.

Such amount includes duplicate claims across multiple debtor legal entities.

These claims are in the process of being reconciled to amounts recorded in the Company's accounting records.

Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate.

The Company may ask the Bankruptcy Court to disallow claims that the Company believes are duplicative, have been later amended or superseded, are without merit, are overstated or should be disallowed for other reasons.

Additional amounts may be included in liabilities subject to compromise in future periods if the Company elects to reject executory contracts, tax claims, unexpired leases and/or other claims asserted as part of the Chapter 11 Cases.

Due to the uncertain nature of many of the potential claims, the magnitude of potential claims not reasonably estimable at this time and potential claims not considered to be probable as of the balance sheet date, these claims are not currently included in liabilities subject to compromise in the accompanying consolidated balance sheet.

As of the date of the issuance of this 2020 Annual Report, the Company’s assessment of the validity of claims received has not been completed.

In light of the substantial number of claims filed, and expected to be filed, the claims resolution process may take considerable time to complete and likely will continue after the Debtors emerge from bankruptcy.

Borrowing Capacity and Availability

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

As a result of the filing of the Chapter 11 Cases, the remaining capacity under almost all of the Company's revolving credit facilities was terminated, as disclosed in Note 6, "Debt." Consequently, the proceeds of sales of vehicles which serve as collateral for such vehicle finance facilities must be applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries (as defined in Note 6, "Debt") and are not otherwise available to fund the Company’s operations.

Additionally, the Company is precluded from accessing any of its subordinated investment in the vehicle collateral until the related defaults are waived or the third party funding under those facilities has been retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness.

Proceeds from vehicle receivables, excluding manufacturer rebates, as of December 31, 2020 and ongoing vehicle sales must be applied to vehicle debt in amortization.

The Company currently has waivers related to the filing of the Chapter 11 Cases under its European ABS and U.K.

Fleet Financing facility that were extended to March 5, 2021, as disclosed in Note 6, "Debt."

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

• the holders of the € 257 million term loan facility incurred by Hertz International Ltd.

received payment in cash in full;

• the holders of claims with respect to the unsecured 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, as further disclosed in Note 6, "Debt;" and

• 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 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 disclosed 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 Company's Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to $ 1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $ 10.00 per share.

Pursuant to the EPCA, certain parties agreed to purchase all unsubscribed shares in the 2021 Rights Offering (the "Backstop Parties").

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 the Effective Date.

Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in the 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.

During the third quarter of 2021, the Company issued additional shares pursuant to the rounding provisions of the 2021 Rights Offering for cash proceeds of approximately $ 4 million at a purchase price of $ 10.00 .

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

During the fourth quarter of 2021, all 1,500,000 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, reorganized Hertz Global entered into a public warrant agreement (the "Public Warrant Agreement") and issued 89,049,029 Public Warrants, subject to certain conditions.

The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 a newly formed non-Debtor special purpose entity, DFLF.

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."

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 DIP Loans in an aggregate amount of up to $ 1.65 billion, 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.

See Note 6, "Debt" 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 disclosed in Note 6, "Debt."

On January 13, 2021, the Bankruptcy Court entered an order authorizing the Debtors to enter into a Canadian fleet financing facility up to CAD$ 400 million.

On January 28, 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A which provides for aggregate maximum borrowings of CAD$ 350 million on a revolving basis.

Subject to initial availability, the initial draw of CAD$ 120 million was used to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest.

The Company's inability to retain any proceeds from the sale of vehicles under its U.S.

ABS programs means that its sources of liquidity are primarily its unrestricted cash and unrestricted cash equivalents on hand, cash generated from its operations and up to $ 800 million from its DIP Credit Agreement.

As of December 31, 2020, the Company had $ 1.1 billion of unrestricted cash and unrestricted cash equivalents and approximately $ 1.1 billion of availability under the DIP Credit Agreement, net of the $ 275 million minimum liquidity requirement, for a total liquidity of $ 2.2 billion which the Company believes will be sufficient to fund its operations through approximately December 31, 2021, assuming it does not experience any unforeseen liquidity needs before then, which could result in the utilization of the liquidity in advance of December 31, 2021.

all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate.

The Public Warrants had 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 (See Note 12, "Fair Value Measurements").

See Note 16, "Equity and Mezzanine Equity – Hertz Global," and Note 18, "Public Warrants - Hertz Global," for additional information on the new equity and Public Warrants issued upon the Company's Chapter 11 emergence.

On the Effective Date, the reorganized Company entered into the First Lien Credit Agreement in an aggregate amount of $ 2.8 billion comprised of senior secured term loan facilities in an aggregate principal amount of $ 1.5 billion plus the First Lien RCF in an aggregate committed amount of $ 1.3 billion.

Additionally, the reorganized Company entered into a new ABS facility program with 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.

On the Effective Date, substantially all existing 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," 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.

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.

See Note 16 , " Equity and Mezzanine Equity – Hertz Global."

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company’s ability to continue as a going concern is contingent upon its ability to successfully implement a plan of reorganization, among other factors, and the realization of assets and the satisfaction of liabilities are subject to uncertainty.

Further, any plan of reorganization could materially change the amounts of assets and liabilities reported in the accompanying consolidated financial statements.

The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern or as a consequence of the Chapter 11 Cases.

As a result of the Company's financial condition, defaults under certain debt agreements as disclosed in Note 6, "Debt," and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists that the Company will be able to continue as a going concern for one year from the issuance date of this 2020 Annual Report.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NYSE Delisting and Transfer to the OTC Market

On May 26, 2020, the Company received a letter from the staff of NYSE Regulation, Inc.

that it had determined to commence proceedings to delist the common stock of Hertz Global from the NYSE in light of the Company’s disclosure on May 22, 2020 that it had commenced voluntary petitions for reorganization under Chapter 11.

The Company appealed the determination in a timely manner and requested a hearing before the NYSE.

On October 15, 2020, the NYSE heard the Company’s appeal.

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.

Hertz Global common stock began trading exclusively on the OTC market on October 30, 2020 under the symbol "HTZGQ." 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.

Hertz Global common stock was delisted 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.

During the Chapter 11 Cases, the Company’s ability to continue as a going concern was contingent upon the Company’s ability to successfully implement the Company’s Plan of Reorganization, among other factors.

As a result of the implementation of the Plan of Reorganization, management believes there is no longer substantial doubt about the Company's ability to continue as a going concern.

Note 2— Significant Accounting Policies

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Certain prior period amounts have been reclassified to conform with current period presentation.

Non-vehicle depreciation expense is now reported on a separate line item in the consolidated statement of operations for all periods presented.

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Principles of Consolidation

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The Company accounts for its investment in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary.

All significant intercompany transactions have been eliminated in consolidation.

All significant intercompany transactions are eliminated in consolidation.

Accounting Standards Codification 852 - Reorganizations

Effective on the Petition Date, the Company applied accounting standards applicable to reorganizations, Accounting Standards Codification 852 - Reorganizations, in preparing the accompanying consolidated financial statements as of and for the year ended December 31, 2020, which requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.

Accordingly, Pre-petition obligations of the Debtors that may be impacted by the Chapter 11 Cases have been classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

These liabilities are reported at the amounts the Company anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

Effective on the Petition Date, the Company applied accounting standards applicable to reorganizations, Accounting Standards Codification ("ASC") 852 - Reorganizations ("Topic 852"), in preparing its consolidated financial statements, which required the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that were directly associated with the reorganization from the ongoing operations of the business.

Accordingly, Pre-petition obligations of the Debtors that were subject to the Chapter 11 Cases were classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

These liabilities were reported at the amounts the Company anticipated would be allowed by the Bankruptcy Court, even if they were subject to settlement at lesser amounts.

See Note 20, "Liabilities Subject to Compromise," for additional information.

In addition, certain charges related to the Chapter 11 Cases are recorded as reorganization items, net in the accompanying consolidated statements of operations for the year ended December 31, 2020.

In addition, certain charges related to the Chapter 11 Cases were recorded as reorganization items, net in the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020.

See Note 21, "Reorganization Items, Net," for additional information.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Under Topic 852, companies must apply “fresh-start” accounting rules upon emergence from Chapter 11 reorganization if certain conditions are met.

The Company did not qualify for "fresh-start" accounting under Topic 852 upon emergence from Chapter 11.

Use of Estimates and Assumptions

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Generally, when revenue earning vehicles are acquired outside of a vehicle repurchase program, the Company estimates the period that the Company will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage).

The Company also estimates the residual value of the applicable revenue earning vehicles at the expected time of disposal, taking into consideration factors such as make, model and options, age, physical condition, mileage, sale location, time of the year and channel of disposition (e.g., auction, retail, dealer direct) and market conditions.

The Company also estimates the residual value of the applicable revenue earning vehicles at the expected time of disposal, taking into consideration factors such as make, model and options, age, physical condition, mileage, sale location, time of the year, channel of disposition (e.g., auction, dealer direct, retail) and market conditions .

Depreciation is recorded over the estimated holding period.

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

Gains and losses on the sale of vehicles, including the costs associated with disposals, are included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.

Gains and losses on the sale of vehicles, including the costs

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

associated with disposals, are included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.

For program vehicles, the manufacturers agree to repurchase program vehicles at a specified price or guarantee the depreciation rate on the vehicles during established repurchase or auction periods, subject to, among other things, certain vehicle condition, mileage and holding period requirements.

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The Company records a provision in accumulated depreciation for excess mileage and vehicle condition, as necessary, during the holding period.

Donlen's revenue earning vehicles are leased under long term agreements with its customers.

These leases contain provisions whereby Donlen has a contracted residual value guaranteed by the lessee, such that it does not bear the risk of any gains or losses on the disposal of these vehicles.

Donlen accounts for its lease contracts using the appropriate lease classifications.

Donlen's revenue earning vehicles were leased under long term agreements with its customers.

These leases contained provisions whereby Donlen had a contracted residual value guaranteed by the lessee, such that it did not bear the risk of any gains or losses on the disposal of these vehicles.

Donlen accounted for its lease contracts using the appropriate lease classifications.

The Donlen business was sold on March 30, 2021, as disclosed in Note 3 , " Divestitures ."

The Company continually evaluates revenue earning vehicles to determine whether events or changes in circumstances have occurred that may warrant revision of the residual value or holding period.

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If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recoverability of Goodwill and Indefinite-lived Intangible Assets

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Components are aggregated into a single reporting unit when they have similar economic characteristics.

The Company has four reporting units:

Rental Car, Europe Rental Car, Other International Rental Car and Donlen.

In the second quarter of 2021, in connection with the Chapter 11 Emergence as disclosed in Note 1 , " Background," and changes in how the Company's CODM regularly reviews operating results and allocates resources, the Company revised its reportable segments to include Canada, Latin America and the Caribbean in its Americas RAC reportable segment, which were previously included in its International RAC reportable segment.

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

The Company has identified two reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business:

Americas RAC and International RAC.

The fair values of the reporting units are estimated using the net present value of discounted cash flows generated by each reporting unit and incorporate various assumptions related to discount rates, growth rates, cash flow projections, tax rates and terminal value rates specific to the reporting unit to which they are applied.

Discount rates are set by using the Weighted-Average Cost of Capital (“WACC”) methodology.

Discount rates are set by using the

HERTZ GLOBAL HOLDINGS, INC.

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WACC methodology.

The Company’s discounted cash flows are based upon reasonable and appropriate assumptions about the underlying business activities of the Company’s reporting units.

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The estimated fair value for a tradename utilizes a relief-from-royalty income approach, which includes the Company’s revenue projections for each asset, along with assumptions for royalty rates, tax rates and WACC.

Subrogation Receivables

The Company records receivables for vehicle damage caused while a vehicle is on rent with a customer based on billed and unbilled recoveries and represents the amount of damage the Company expects to recover.

Amounts recorded are estimated using a combination of actual historical data with respect to damage expense and collections and other facts and circumstances.

Subrogation receivables are recorded as a contra-expense (i.e.

a credit to direct vehicle and operating expense in the accompanying consolidated statements of operations) in the period in which the expense was incurred.

The Company had net subrogation receivables of $ 67 million and $ 109 million which are included in non-vehicle receivables, net in the accompanying consolidated balance sheets as of December 31, 2020 and 2019, respectively.

The Company recognized the effects of the TCJA enacted on December 22, 2017, which created the global intangible low-tax income ("GILTI") provision that imposes U.S.

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In 2018 and 2019, the Company asserted indefinite reinvestment on certain of its foreign earnings.

As of December 31, 2020, the Company no longer asserts permanent reinvestment of foreign earnings, due to the impact from COVID-19, as disclosed in Note 1, "Background." The Company does not anticipate that the change in its assertion will have a material impact on its cash flows during the next twelve months.

Effective as of December 31, 2020, the Company no longer asserts permanent reinvestment of foreign earnings, due to the impact from COVID-19, as disclosed in Note 1, "Background."

Valuation Allowances

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Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions.

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The Company evaluates the realizability of its deferred tax assets on a quarterly basis.

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however, due to the complexity of these uncertainties and the impact of tax audits, the ultimate resolutions may differ significantly from the Company’s estimates.

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Revenue Recognition

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GAAP and in 2018 and 2019 issued amendments and updates to the new lease standard (collectively "Topic 842").

Upon adoption of Topic 842, on January 1, 2019, the Company accounts for revenue earned from vehicle rentals and rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset under Topic 842.

Prior to the adoption of Topic 842, the Company accounted for such revenue under Revenue from Contracts with Customers ("Topic 606").

As such, vehicle rental and rental related revenue is recognized under Topic 842 for the years ended December 31, 2020 and December 31, 2019, and under Topic 606 for the year ended December 31, 2018.

The policy that follows herein is applicable under Topics 842 and 606 unless otherwise noted.

The Company recognizes two types of revenue:

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Revenue from charges that are charged to the customer, such as gasoline, vehicle licensing and airport concession fees, is recorded on a gross basis with a corresponding charge to direct vehicle and operating expense.

Sales commissions paid to third parties are generally expensed when incurred due to the short-term nature of the related transaction on which the commission was earned and are recorded within selling, general and administrative

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Payments are due from customers at the completion of the rental, except for customers with negotiated payment terms, generally net 30 days or less, which are invoiced and remain as accounts receivable until collected.

Loyalty Programs - The Company offers loyalty programs, primarily Hertz Gold Plus Rewards, wherein customers are eligible to earn loyalty points that are redeemable for free rental days or can be converted to loyalty points for redemption of products and services under loyalty programs of other companies.

Upon adoption of Topic 606, each transaction that generates loyalty points results in the deferral of revenue equivalent to the retail value at the date the points are earned.

Upon adoption of ASC 606, Revenue from Contracts with Customers ("Topic 606"), each transaction that generates loyalty points results in the deferral of revenue equivalent to the retail value at the date the points are earned.

The associated revenue is recognized when the customer redeems the loyalty points at some point in the future.

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Some of the commercial contracts contain provisions which allow for rebates to the entity based on achieving a specific rental volume threshold.

Rebates are treated as lease incentives under Topic 842 and variable consideration under Topic 606, and are recognized as a reduction of revenue at the time of the rental based on the rebate expected to be earned by the entity.

Rebates are treated as lease incentives and are recognized as a reduction of revenue at the time of the rental based on the rebate expected to be earned by the entity.

Licensee Revenue

The Company has franchise agreements which allow an independent entity to rent their vehicles under the Company’s brands, primarily Hertz, Dollar or Thrifty, for a franchise fee.

Franchise fees are earned over time for the duration of the franchise agreement and are typically based on the larger of a minimum payment or an amount representing a percentage of net sales of the franchised business.

Under Topic 606 franchise fees are recognized as earned and when collectability is reasonably assured.

Franchise fees are earned over time for the duration of the franchise agreement and are typically based on the larger of a minimum payment or an amount

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representing a percentage of net sales of the franchised business.

Franchise fees that relate to a future contract term, such as initial fees or renewal fees, are deferred and recognized over the term of the franchise agreement.

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Fleet Leasing and Fleet Management Revenue

The Company's Donlen subsidiary generates revenue from various fleet leasing and fleet management services.

Donlen’s operating leases for fleets have lease periods that are typically for twelve months, after which the lease converts to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter.

The Company's fleet leases contain a terminal rental adjustment clause ("TRAC") where, upon sale of the vehicle following the termination of the lease, a TRAC adjustment may result through which the lessee is credited or charged with the gain or loss on the vehicle's disposal.

Such TRAC adjustments are considered variable charges.

Fleet management services are comprised of fuel purchasing and management, preventive vehicle maintenance, repair consultation, toll management and accident management.

Fleet management revenue is recognized net of any fees collected from customers on behalf of third-party service providers, as services are rendered.

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The Company's Donlen subsidiary, which sold substantially all of its assets and certain liabilities on March 30, 2021, generated revenue from various fleet leasing and fleet management services.

Donlen’s operating leases for fleets had lease periods that were typically for twelve months, after which the lease converted to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter.

The Company's fleet leases contained a terminal rental adjustment clause ("TRAC") where, upon sale of the vehicle following the termination of the lease, a TRAC adjustment may result through which the lessee was credited or charged with the gain or loss on the vehicle's disposal.

Such TRAC adjustments were considered variable charges.

Fleet management services were comprised of fuel purchasing and management, preventive vehicle maintenance, repair consultation, toll management and accident management.

Fleet management revenue was recognized net of any fees collected from customers on behalf of third-party service providers, as services were rendered.

Contract Balances

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The Company's cash and cash equivalents are invested in various investment grade institutional money market funds, and bank money market and interest-bearing accounts.

Restricted cash and restricted cash equivalents includes cash and cash equivalents that are not readily available for use in the Company's operating activities.

Restricted cash and restricted cash equivalents are primarily comprised of proceeds from the disposition of vehicles pledged under the terms of vehicle debt financing arrangements and is restricted for the purchase of revenue earning vehicles and other specified uses under the vehicle debt facilities, cash utilized as credit enhancement under those arrangements, and certain cash accounts supporting regulatory reserve requirements related to the Company's self-insurance.

As a result of the filing of the Chapter 11 Cases, the Company has multiple segregated bank accounts, some of which can only be accessed upon approval by the Bankruptcy Court, and cash collateral accounts for certain purposes.

Restricted cash and restricted cash equivalents include cash and cash equivalents that are not readily available for use in the Company's operating activities.

Restricted cash and restricted cash equivalents are primarily comprised of proceeds from the disposition of vehicles pledged under the terms of vehicle debt financing arrangements and are restricted for the purchase of revenue earning vehicles and other specified uses under the vehicle debt facilities, cash utilized as credit enhancement under those arrangements, proceeds from the Term Loan C which are utilized to collateralize letters of credit, and certain cash accounts supporting regulatory reserve requirements related to the Company's self-insurance.

These funds are primarily held in demand deposit and money market accounts or in highly rated money market funds with investments primarily in government and corporate obligations.

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The Company limits exposure relating to financial instruments by diversifying the financial instruments among various counterparties, which consist of major financial institutions.

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Receivables, Net of Allowance

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Estimates for future credit memos are based on historical experience and are reflected as reductions to revenue, while bad debt expense is reflected as a component of direct vehicle and operating expense in the accompanying consolidated statements of operations.

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Property and Equipment, Net

The Company's property and equipment, net consists of the following:

The Company's property and equipment, net consisted of the following:

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

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Property and equipment are stated at cost and are depreciated utilizing the straight-line method over the estimated useful lives of the related assets.

Useful lives are as follows:

Estimated useful lives are as follows:

Buildings 1 to 50 years

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Long-lived assets to be disposed of are reported at the lower of carrying value or estimated fair value less costs to sell.

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Stock-Based Compensation

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The Company has estimated the fair value of options issued at the date of grant using a Black-Scholes option-pricing model, which includes assumptions related to volatility, expected term, dividend yield and risk-free interest rate.

The Company accounts for restricted stock unit and performance stock unit awards as equity classified awards.

For restricted stock units ("RSUs") the expense is based on the grant-date fair value of the stock and the number of shares that vest, recognized over the service period.

For performance stock units ("PSUs") and performance stock awards ("PSAs"), the expense is based on the grant-date fair value of the stock, recognized over a two to four year

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service period depending upon the applicable performance condition.

For PSUs and PSAs, the Company re-assesses the probability of achieving the applicable performance condition quarterly and adjusts the recognition of expense accordingly.

The Company accounts for restricted stock unit ("RSU") and performance stock unit ("PSU") awards when granted as equity classified awards.

For RSUs the expense is based on the grant-date fair value of the stock and the number of shares that vest, recognized over the service period.

For any PSUs and performance share awards ("PSAs") granted, the expense is based on the grant-date fair value of the stock, recognized over a service period depending upon the applicable performance condition.

For any PSUs and PSAs, the Company re-assesses the probability of achieving the applicable performance condition quarterly and adjusts the recognition of expense accordingly.

The Company includes the excess tax benefit within income tax expense in the accompanying consolidated statements of operations when realized.

Fair Value Measurements

Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the "exit price").

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the "exit price").

Fair value is a market-based measurement that is determined based upon assumptions that market participants would use in pricing an asset or liability, including consideration of nonperformance risk.

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The Company is exposed to a variety of market risks, including the effects of changes in interest rates, gasoline and diesel fuel prices and foreign currency exchange rates.

The Company manages exposure to these market risks through regular operating and financing activities and, when deemed appropriate, through the use of financial instruments.

The Company manages exposure to these market risks through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments.

Financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes.

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As the Company does not have financial instruments that are designated and qualify as hedging instruments, the changes in their fair value are recognized currently in the Company's operating results.

Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries whose functional currency is the local currency are translated at the rate of exchange in effect on the balance sheet date;

income and expenses are translated at the average exchange rates throughout the year.

The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.

Foreign currency exchange rate gains and losses resulting from transactions are included in selling, general and administrative expense in the accompanying consolidated statements of operations.

Advertising and sales promotion costs are expensed the first time the advertising or sales promotion takes place.

Advertising costs are reflected as a component of selling, general and administrative expenses in the accompanying

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consolidated statements of operations and for the years ended December 31, 2020, 2019 and 2018 were $ 112 million, $ 318 million and $ 238 million, respectively.

Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries whose functional currency is the local currency are translated at the rate of exchange in effect on the balance sheet date;

income and expenses are translated at the average exchange rates throughout the year.

The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.

Foreign currency exchange rate gains and losses resulting from transactions are included in other (income) expense in the accompanying consolidated statements of operations.

Advertising production costs are deferred and expensed when the advertising first takes place.

Advertising communication costs are expensed as incurred.

Advertising costs are reflected as a component of selling, general and administrative expenses in the accompanying consolidated statements of operations and for the years ended December 31, 2021, 2020 and 2019 were $ 162 million, $ 112 million and $ 318 million, respectively.

The Company classifies long-lived assets and liabilities to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and the sale is probable and expected to be completed within one year.

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Recently Issued Accounting Pronouncements

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued guidance that sets forth a current expected credit loss impairment model for financial assets, which replaces the current incurred loss model, and issued amendments and updates to the new standard in 2018 and 2019.

This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis.

The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset.

The Company adopted this guidance when effective, on January 1, 2020, using a modified retrospective transition method.

The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or cash flows.

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement

In August 2018, the FASB issued guidance on a customer's accounting for implementation fees paid in a cloud computing service contract arrangement that addresses which implementation costs to capitalize as an asset and which costs to expense.

Capitalized implementation fees are to be expensed over the term of the cloud computing arrangement, and the expense is required to be recognized in the same line item in the income statement as the associated hosting service expenses.

The entity is also required to present the capitalized implementation fees on the balance sheet in the same line item as the prepayment for hosting service fees associated with the cloud computing arrangement.

The Company adopted this guidance when effective, on January 1, 2020, using a prospective transition method.

The adoption of this guidance did not have a material impact on the Company's financial position, results of operations or cash flows.

The Company has hosting arrangements in connection with its Enterprise Resource Planning systems.

Prior to the adoption of this guidance, the Company capitalized certain implementation costs for its hosting arrangements in intangible assets, net, in the accompanying consolidated balance sheet as of December 31, 2019.

Subsequent to the adoption of this guidance on January 1, 2020, the Company records implementation fees incurred in connection with its hosting arrangements in prepaid expenses and other assets in the accompanying consolidated balance sheet as of December 31, 2020.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued guidance that simplifies the accounting for income taxes by removing certain exceptions in existing guidance and improves consistency in application by clarifying and amending existing guidance.

This guidance is effective for annual periods beginning after December 15, 2020, and interim periods within those annual periods.

On July 1, 2020, the Company adopted this guidance early, as permitted, on a

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prospective basis, where adjustments as of January 1, 2020 were not material;

therefore, adoption of this guidance had no material impact on the Company's financial position, results of operations or cash flows.

Facilitation of the Effects of Reference Rate Reform

In March 2020, the FASB issued guidance that provides optional expedients and exceptions for contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform initiatives.

This guidance is effective beginning March 12, 2020 through December 31, 2022 where the transition method varies depending upon the specific expedient or exception.

On December 31, 2020, the Company early adopted on a prospective basis, as permitted, the optional practical expedient for contract modification for all debt and lease agreements under Topics 470 and 842.

The Company continues to work with its lenders in identifying reference rate transition options and expected timing for new rates to be implemented into existing agreements.

At the time of this filing, the adoption of this guidance had no material impact on the Company's financial position, results of operations or cash flows.

Scope of Reference Rate Reform

In January 2021, the FASB issued guidance that clarifies that entities with derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment due to reference rate reform may elect to apply certain optional expedients and exceptions, including contract modification relief, provided in Topic 848.

Entities may elect to apply the guidance on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 or (2) prospectively to new modifications from any date in an interim period that includes or is after January 7, 2021, up to the date that financial statements are available to be issued.

The Company will apply the guidance prospectively, as applicable, and does not expect a material impact on its financial position, results of operations or cash flows.

Note 3— Divestitures

Donlen Asset Sale

In November 2020, the Company entered into a stock and asset purchase agreement (the "Purchase Agreement") with Freedom Acquirer LLC (the "Buyer"), an affiliate of Athene Holding Ltd., to sell substantially all of the assets of its wholly-owned subsidiary Donlen.

At the closing, the Buyer will pay approximately $ 825 million in cash, subject to adjustments based on the level of assumed indebtedness, working capital and fleet equity.

Within three business days of the execution of the Purchase Agreement, the Buyer made a good faith deposit of $ 82.5 million into a deposit escrow that will either (i) be credited to the purchase price payable at the closing and released to the Company, (ii) be released to the Company upon termination of the Purchase Agreement in certain circumstances in which the Buyer has breached the Purchase Agreement or (iii) be released to the Buyer if the Purchase Agreement is terminated for other reasons.

A hearing is scheduled on March 1, 2021 with the Bankruptcy Court for final approval of the sale.

The assets and liabilities of Donlen, included in the Company's All Other Operations segment, to be included in the sale have been classified as held for sale in the accompanying consolidated balance sheet as of December 31, 2020.

Assets and liabilities classified as held for sale are required to be recorded at the lower of the carrying value

In November 2020, the Company entered into a stock and asset purchase agreement with Freedom Acquirer LLC (the "Buyer"), an affiliate of Athene Holding Ltd., to sell substantially all of the assets of its wholly-owned subsidiary Donlen.

On March 30, 2021, the Company completed the sale.

The proceeds from the sale were subject to certain post-closing adjustments in the second quarter of 2021 based on the level of assumed indebtedness, working capital and fleet equity.

For the year ended December 31, 2021, the Company recognized a pre-tax gain in its corporate operations of $ 400 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $ 891 million less $ 543 million net book value of assets sold plus a $ 53 million receivable in connection with the sale where cash proceeds were received in September 2021.

On March 30, 2021, the Company and the Buyer entered into a transition services agreement which provides for certain transitional services in connection with the sale.

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or fair value less any costs to sell.

The assets and liabilities of Donlen included in the sale were classified as held for sale in the accompanying consolidated balance sheet as of December 31, 2020.

Assets and liabilities classified as held for sale are required to be recorded at the lower of the carrying value or fair value less any costs to sell.

The major classes of assets and liabilities held for sale as of December 31, 2020 are presented below at their carrying value.

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Total liabilities held for sale $ 1,431

Sale of Non-vehicle Capital Assets

In 2019, the Company completed the sale of certain non-vehicle capital assets in its U.S.

Rental Car segment (the "Non-Vehicle Asset Sale") and recognized a $ 39 million pre-tax gain on the sale which is included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2019.

In 2020, the Company received additional cash from the Non-Vehicle Asset Sale and recognized an additional $ 20 million pre-tax gain on the sale, which is included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.

Termination of 767 Auto Leasing Agreement

In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”) the option to acquire certain vehicles from Hertz at rates aligned with the rates at which Hertz sold vehicles to third parties where 767’s payment obligations were guaranteed by American Entertainment Properties Corp.

The 767 Lease Agreement was terminated effective October 31, 2021.

Prior to the termination of the 767 Lease Agreement, the Company determined that it was the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impacted 767's economic performance and the Company's obligation to absorb 25 % of 767's gains/losses and, accordingly, 767 was consolidated by the Company as a VIE.

During the year ended December 31, 2021, 767 distributed $ 38 million to AEPC along with the return of certain vehicles, and there were no cash contributions from AEPC to 767.

During the year ended December 31, 2020, 767 distributed $ 75 million to AEPC and there were no cash contributions from AEPC to 767, except for certain services.

Sale of Marketable Securities

In 2020, the Company sold marketable securities for $ 74 million and recognized an immaterial gain on the sale in its corporate operations, which is included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.

In 2020, the Company sold marketable securities for $ 74 million and recognized an immaterial gain on the sale in its corporate operations, which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.

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Sale of Non-vehicle Capital Assets

In 2019, the Company completed the sale of certain non-vehicle capital assets in its Americas RAC segment and recognized a $ 39 million pre-tax gain on the sale which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2019.

In 2020, the Company received additional cash from the sale and recognized an additional $ 20 million pre-tax gain on the sale, which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.

Note 4— Revenue Earning Vehicles

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Revenue earning vehicles, net $ 9,226 $ 6,062

(1) Represents the carrying amount of vehicles currently placed on the Company's retail lots for sale or actively in the process of being sold through other disposition channels.

(1) Excludes amounts associated with Donlen that are classified as held for sale as of December 31, 2020.

See Note 3, "Divestitures," for additional information.

(2) Represents the carrying amount of vehicles placed on the Company's retail lots for sale or actively in the process of being sold through other disposition channels.

Note 5— Goodwill and Intangible Assets, Net

Technology-related Intangible and Other Assets

Due to uncertainty surrounding the Company's financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company concluded in the second quarter of 2020 that there was an impairment of such technology-related intangible assets and capitalized cloud computing implementation costs.

In the second quarter of 2020, the Company recorded an impairment charge of $ 193 million in its corporate operations, representing an impairment of the carrying value of the abandoned portion of such assets as of June 30, 2020 of $ 124 million and $ 69 million of technology-related intangible assets and other assets, respectively.

Recoverability of Goodwill and Indefinite-lived Intangible Assets

The Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by ASC 350.

The Company considered factors such as, but not limited to, its expectations of projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases.

On an annual basis as of October 1, and at interim periods when circumstances require as a result of a triggering event as defined by ASC 350 - Intangibles, Goodwill and Other ("Topic 350"), the Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis.

An impairment is deemed to exist if the carrying value of goodwill or indefinite-lived intangible assets exceed their fair value as determined using level 3 inputs under the GAAP fair value hierarchy.

The reviews of fair value involve judgment and estimates, including projected revenues, long-term growth rates, royalty rates and discount rates.

The Company believes that its valuation techniques and assumptions are reasonable for this purpose.

The Company performed the goodwill impairment analyses using the income approach, a measurement using level 3 inputs under the U.S.

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In performing the impairment analyses, the weighted-average cost of capital used in the discounted cash flow model was calculated based upon the fair value of the Company's debt and stock price with a debt-to-equity ratio comparable to the vehicle rental car industry.

This present value model requires management to estimate future cash flows and forecasted earnings before interest, taxes, depreciation and amortization ("EBITDA") margins and capital investments of each reporting unit.

This present value model requires management to estimate future cash flows and forecasted EBITDA margins and capital investments of each reporting unit.

The Company revised its reportable segments in Q2 2021, as disclosed in Note 19, "Segment Information," and the change in reporting units had no impact to the valuation of the Company's goodwill.

The assumptions the Company used to estimate future cash flows and EBITDA margins are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant.

The discount rate used for each reporting unit ranged from 13.0 % to 13.5 %.

All reporting units that have goodwill were noted to have a fair value that exceeded their carrying values.

Each of the Company's reporting units had fair values that exceeded their respective carrying values by more than 20 %.

Each of the Company's reporting units had a fair value that exceeded its respective carrying value, the lowest of which was greater than 25 %.

The Company performed the intangible impairment analyses for indefinite-lived intangible assets using the relief-from-royalty income approach, a measurement using level 3 inputs under the U.S.

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The Company considered consistent factors as described above related to goodwill in addition to royalty rates.

The assumptions the Company uses to estimate royalty rates are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant.

The discount rate used for each indefinite-lived intangible ranged from 13 % to 14.0 %.

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indefinite-lived intangibles were noted to have a fair value that exceeded their carrying values, except for the Hertz tradename in the Company's International RAC segment where the Company recorded an impairment charge of $ 20 million.

Each of the Company's other indefinite-lived intangible assets had fair values that exceeded their respective carrying values by more than 10 %, except in the Company’s U.S.

RAC segment which was in excess by 7 % of the carrying value of $ 934 million.

Further deterioration in the general economic conditions in the travel industry, the Company’s cash flows and the Company's ability to obtain future financing to maintain its fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters.

The Company will continue to closely monitor actual results versus its expectations as well as any significant changes in market events or conditions, including the impact of COVID-19 on the Company's business and the travel industry, and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital.

If the Company's expectations of the operating results, both in magnitude or timing, do not materialize, or if its weighted average cost of capital increases, the Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

assumptions the Company uses to estimate royalty rates are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant.

The discount rate used for each indefinite-lived intangible ranged from 13.0 % to 13.5 %.

All indefinite-lived intangibles were noted to have fair values that exceeded their carrying values, the lowest of which was greater than 25 %.

Technology-related Intangible and Other Assets

The following summarizes the changes in the Company's goodwill by segment:

(In millions) U.S.

Rental Car International Rental Car All Other Operations Total

(In millions) Americas RAC segment International RAC segment Total

Balance as of January 1, 2021

Goodwill $ 1,029 $ 236 $ 36 $ 1,301

Accumulated impairment losses

$ 1,029 $ 236 $ 1,265

1,029 18 36 1,083

Goodwill acquired and other changes during the period (1)

Accumulated impairment losses

— ( 220 ) ( 220 )

1,029 16 1,045

Goodwill disposal and other changes during the period — — —

Balance as of December 31, 2021

2 unchanged sentences

$ 1,029 $ 16 $ 1,045

(1) Goodwill associated with the Company's All Other Operations segment, was classified as held for sale as of December 31, 2020, as disclosed in Note 3, "Divestitures."

(In millions) U.S.

Rental Car International Rental Car All Other Operations Total

(1) Excludes goodwill of $ 36 million associated with Donlen that was classified as held for sale as of December 31, 2020.

See Note 3, "Divestitures," for additional information.

(In millions) Americas RAC segment International RAC segment Total (1)

Balance as of January 1, 2020

3 unchanged sentences

1,029 18 1,047

Goodwill acquired and other changes during the period — — — —

Goodwill disposal and other changes during the period — ( 2 ) ( 2 )

— ( 2 ) ( 2 )

Balance as of December 31, 2020

2 unchanged sentences

$ 1,029 $ 16 $ 1,045

(1) Excludes goodwill of $ 36 million associated with Donlen that was classified as held for sale as of December 31, 2020.

See Note 3, "Divestitures," for additional information.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible Assets, Net

Intangible assets, net, consisted of the following major classes:

Intangible assets, net, consists of the following major classes:

December 31, 2021

6 unchanged sentences

Technology-related intangibles 359 ( 271 ) 88

359 ( 232 ) 127

Total 1,084 ( 990 ) 94

1 unchanged sentence

Tradenames (2)

2,794 — 2,794

Total 2,818 — 2,818

8 unchanged sentences

Technology-related intangibles 355 ( 228 ) 127

515 ( 236 ) 279

Total 1,080 ( 906 ) 174

1 unchanged sentence

Tradenames (2)

2,794 — 2,794

Total 2,818 — 2,818

Total intangible assets, net $ 3,898 $ ( 906 ) $ 2,992

(1) Technology-related intangibles include software not yet placed into service.

(1) Other amortizable intangible assets primarily include reacquired franchise rights.

(2) As of December 31, 2021 and 2020, $ 2.2 billion was recorded in the Company's Americas RAC segment and $ 600 million in the Company's International RAC segment.

(3) Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.

(4) Excludes intangible assets associated with Donlen that were classified as held for sale as of December 31, 2020.

See Note 3, "Divestitures," for additional information.

Years Ended December 31,

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2 unchanged sentences

Total expected amortization expense $ 94

The Company's debt, including its available credit facilities, consists of the following ($ in millions):

The Company's debt, including its available credit facilities, consists of the following ($ in millions) as of December 31, 2021 and 2020.

The table and disclosures below exclude debt associated with Donlen that was classified as held for sale as of December 31, 2020.

See Note 3, "Divestitures," for additional information.

Facility Weighted-Average Interest Rate as of December 31, 2021 Fixed or

2 unchanged sentences

Non-Vehicle Debt

Senior Term Loan (1)

Floating 6/2023 $ — $ 660

Senior RCF (1)

Floating 6/2021 — —

Senior Notes (1)(2)

Fixed 10/2022-1/2028 — 2,700

Senior Second Priority Secured Notes (1)

Fixed 6/2022 — 350

Senior Secured Superpriority Debtor-in-Possession Credit Agreement 8.53 % Floating 12/2021 250 —

Promissory Notes (1)

Fixed 1/2028 — 27

Other Non-Vehicle Debt 7.26 % Fixed Various 18 18

Term B Loan 3.75 % Floating 6/2028 $ 1,294 $ —

Term C Loan 3.75 % Floating 6/2028 245 —

Senior Notes Due 2026 4.63 % Fixed 12/2026 500 —

Senior Notes Due 2029 5.00 % Fixed 12/2029 1,000 —

First Lien RCF N/A Floating 6/2026 — —

Other Non-Vehicle Debt (1)

8.49 % Fixed Various 16 18

Senior Secured Superpriority Debtor-in-Possession Credit Agreement N/A N/A N/A — 250

Unamortized Debt Issuance Costs and Net (Discount) Premium

2 unchanged sentences

Non-Vehicle Debt Subject to Compromise (2)

Senior Term Loan 3.50 % Floating 6/2023 656 —

Senior RCF 3.41 % Floating 6/2021 615 —

Senior Term Loan N/A N/A N/A — 656

Senior RCF N/A N/A N/A — 615

Senior Notes (2)

6.11 % Fixed 10/2022-1/2028 2,700 —

Senior Second Priority Secured Notes 7.63 % Fixed 6/2022 350 —

Promissory Notes 7.00 % Fixed 1/2028 27 —

N/A N/A N/A — 2,700

Senior Second Priority Secured Notes N/A N/A N/A — 350

Promissory Notes N/A N/A N/A — 27

Alternative Letter of Credit Facility (3)

5.25 % Floating 11/2023 114 —

Senior RCF Letter of Credit Facility 5.50 % Floating 6/2021 17 —

N/A N/A N/A — 114

Senior RCF Letter of Credit Facility N/A N/A N/A — 17

Unamortized Debt Issuance Costs and Net (Discount) Premium

1 unchanged sentence

Vehicle Variable Funding Notes

HVF II Series 2013-A (3)(6)

HVF III Series 2021-A Class A (4)

1.62 % Floating 6/2023 2,813 —

2 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2 unchanged sentences

2021 December 31,

Vehicle Medium Term Notes

HVF II Series 2015-1 (3)

N/A N/A N/A — 780

HVF II Series 2015-3 (3)

3.64 % Fixed 9/2020 163 371

HVF II Series 2016-2 (3)

3.98 % Fixed 3/2021 263 595

HVF II Series 2016-4 (3)

3.65 % Fixed 7/2021 187 424

HVF II Series 2017-1 (3)

3.91 % Fixed 10/2020 199 450

HVF II Series 2017-2 (3)

4.31 % Fixed 10/2022 164 350

HVF II Series 2018-1 (3)

3.86 % Fixed 2/2023 468 1,000

HVF II Series 2018-2 (3)

4.31 % Fixed 6/2021 94 200

HVF II Series 2018-3 (3)

4.62 % Fixed 7/2023 95 200

HVF II Series 2019-1 (3)

HVF III Series 2021-A Class B (4)

3.65 % Fixed 6/2023 188 —

HVF II Series 2019-2 (3)

Vehicle Medium Term Notes

HVF III Series 2021-1 (4)

1.66 % Fixed 12/2024 2,000 —

HVF II Series 2019-3 (3)

HVF III Series 2021-2 (4)

2.12 % Fixed 12/2026 2,000 —

HFLF Variable Funding Notes

HFLF Series 2013-2 (4)(6)

6.12 % Floating 1/2021-6/2022 — 286

HFLF Medium Term Notes

HFLF Series 2016-1 (4)

Vehicle Variable Funding Notes

HVF II Series 2013-A (5)

N/A N/A N/A — 1,940

HFLF Series 2017-1 (4)

2.94 % Both 1/2021-8/2022 — 229

HFLF Series 2018-1 (4)

2.74 % Both 1/2021-8/2022 — 462

HFLF Series 2019-1 (4)

2.31 % Both 1/2021-8/2022 — 650

Vehicle Medium Term Notes

HVF II Series 2015-3 N/A N/A N/A — 163

HVF II Series 2016-2 N/A N/A N/A — 263

HVF II Series 2016-4 N/A N/A N/A — 187

HVF II Series 2017-1 N/A N/A N/A — 199

HVF II Series 2017-2 N/A N/A N/A — 164

HVF II Series 2018-1 N/A N/A N/A — 468

HVF II Series 2018-2 N/A N/A N/A — 94

HVF II Series 2018-3 N/A N/A N/A — 95

HVF II Series 2019-1 N/A N/A N/A — 330

HVF II Series 2019-2 N/A N/A N/A — 354

HVF II Series 2019-3 N/A N/A N/A — 352

Vehicle Debt - Other

Vehicle RCF N/A N/A N/A — 146

European Vehicle Notes (6)

5.07 % Fixed 10/2021-3/2023 888 810

N/A N/A N/A — 888

European ABS (4)

2 unchanged sentences

2.49 % Floating 1/2023 191 53

Donlen Canadian Securitization (3)

1.54 % Floating 12/2022 — 24

Australian Securitization (4)

2 unchanged sentences

Financing Facility 3.68 % Floating 1/2022-12/2024 98 105

Toyota Financing Facility 2.20 % Floating 2/2022-2/2023 9 —

Other Vehicle Debt 2.89 % Floating 1/2022-12/2024 93 37

3 unchanged sentences

N/A - Not applicable

(1) As a result of filing the Chapter 11 Cases, certain debt was classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

The weighted-average interest rate for such debt is disclosed in subsequent rows under "non-vehicle debt subject to compromise."

(1) Other non-vehicle debt is primarily comprised of $ 12 million in capital lease obligations .

(2) Reference to the "Senior Notes" includes the series of Hertz's unsecured senior notes set forth in the table below which were included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

On the Effective Date, in

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(2) References to the "Senior Notes" include the series of Hertz's unsecured senior notes set forth in the table below which are included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

Outstanding principal amounts for each such series of the Senior Notes is also specified below:

accordance with the Plan of Reorganization, the Senior Notes were repaid in full and terminated.

On July 1, 2021, Wells Fargo Bank, National Association, as indenture trustee for the Senior Notes, filed a complaint against Hertz and certain of its subsidiaries requesting declaratory judgement that additional amounts are owed with respect to certain premiums and post-petition interest with respect to the Senior Notes.

Hertz disputes that any such amounts are owed and on August 2, 2021 filed a motion to dismiss the complaint.

On December 23, 2021, the Company's motion to dismiss was granted by the Bankruptcy Court.

See Note 14, "Contingencies and Off-Balance Sheet Commitments," for additional information.

(In millions) Outstanding Principal

4 unchanged sentences

6.000 % Senior Notes due January 2028

$ 2,700 $ 2,700

(3) Maturity reference is to the earlier "expected final maturity date" as opposed to the subsequent "legal final maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness originally expected the outstanding principal of the relevant indebtedness to be repaid in full.

(3) Includes default interest as of December 31, 2020.

(4) Maturity reference is to the earlier "expected final maturity date" as opposed to the subsequent "legal final maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness originally expect the outstanding principal of the relevant indebtedness to be repaid in full.

The legal final maturity date is the date on which the outstanding principal of the relevant indebtedness is legally due and payable in full.

While HVF II remains in an amortization event, as described below, the expected maturity will deviate from its stated, contractual maturity date during amortization as payoff is based on the sale of the underlying vehicles and the pro-rata application of those proceeds across all outstanding HVF II Series of Notes in accordance with their seniority.

During the amortization event, the ultimate maturity of the notes will depend upon the length of time the underlying vehicle collateral is sold or the timing of the refinancing of the notes.

(4) In the case of the HFLF Medium Term Notes, such notes are repayable from cash flows derived from third-party leases comprising the underlying HFLF collateral pool.

As a result of the Chapter 11 Cases and the resulting amortization events, as described below, the revolving period for all series was terminated and are amortizing monthly by an amount equal to the lease collections payable to that series and the maturity date referenced for each series of HFLF Medium Term Notes represents the date by which Hertz expects such series of notes to be repaid in full, which is based upon the contractual amortization of the underlying leases as well as the assumed rate of prepayments of such leases.

Such maturity reference is to the “expected final maturity date” as opposed to the subsequent “legal final maturity date.” The legal final maturity date is the date on which the relevant indebtedness is legally due and payable.

Although the underlying lease cash flows that support the repayment of the HFLF Medium Term Notes may vary, the cash flows generally are expected to approximate a straight-line amortization of the related notes from the initial maturity date through the expected final maturity date.

(5) Includes default interest as of December 31, 2020, which was comprised of an increase in the contractual spread.

(6) References to the "European Vehicle Notes" include the series of Hertz Holdings Netherlands B.V.'s, an indirect wholly-owned subsidiary of Hertz organized under the laws of the Netherlands ("Hertz Netherlands"), unsecured senior notes (converted from Euros to U.S.

dollars at a rate of 1.22 to 1 and 1.12 to 1 as of December 31, 2020 and 2019, respectively) set forth in the table below.

Outstanding principal amounts for each such series of the European Vehicle Notes is also specified below:

Dollars at a rate of 1.22 to 1 as of December 31, 2020) set forth in the table below.

On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were repaid in full and cancelled.

(In millions) Outstanding Principal

2 unchanged sentences

5.500 % Senior Notes due March 2023

(6) Includes default interest which is comprised of an increase in the contractual spread.

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," and as noted in the table above, the Company reclassified certain of its non-vehicle debt instruments, net of deferred financing costs, discounts and premiums, as applicable, to liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

The Company has suspended accruing and paying interest and amortizing deferred financing costs, discounts and premiums, as applicable, on the Senior Notes, Promissory Notes and Alternative Letter of Credit Facility, as of the Petition Date.

The Company is continuing to pay in cash an amount equal to the monthly interest at the non-default rate for the Senior Term Loan and Senior RCF (collectively, "the First Lien Facilities"), and has suspended amortizing the associated deferred financing costs, discounts and premiums for the First Lien Facilities, as applicable, as of the Petition Date.

On November 3, 2020, as directed by the Bankruptcy Court in an order dated October 29, 2020, the Company paid in cash an amount equal to the monthly interest that would have accrued on the First Lien Facilities during the period May 1, 2020 through June 30, 2020 upon entry of the DIP Order as defined below.

On December 1, 2020, as directed by the Bankruptcy Court in an order dated August 25, 2020, the Company paid in cash an amount equal to half of the interest that would have accrued on the Senior Second Priority Secured Notes during the period July 1, 2020 through November 30, 2020 with the remaining half paid in kind as of December 31, 2020.

On February 4, 2021, as directed by the Bankruptcy Court, the Company will continue to pay half of the interest on the Senior Second Priority Secured Notes with the remaining half paid in kind.

Chapter 11 and Emergence

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company reclassified certain of its non-vehicle debt instruments, net of deferred financing costs, discounts and premiums, as applicable, to liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility.

Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited ("HIL"), Hertz Netherlands and the direct and indirect subsidiary companies located outside of the U.S.

and Canada (collectively the "International Subsidiaries"), some of which were waived or amended subject to certain time limitations, and (ii) HVF, HVF II, and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

As disclosed in Note 1, "Background," on May 14, 2021, the Debtors filed the Plan of Reorganization with the Bankruptcy Court, which was confirmed by the Bankruptcy Court on June 10, 2021.

On the Effective Date, the Company emerged from Chapter 11 as disclosed in Note 1, "Background" and, in accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S.

ABS Program and the HVIF U.S.

ABS Program were repaid in full and cancelled, as further disclosed below.

Upon the Debtor's emergence from Chapter 11 and the associated debt payoffs, any events of default, termination and/or amortization events ceased to exist.

HERTZ GLOBAL HOLDINGS, INC.

1 unchanged sentence

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the U.S.

Vehicle RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility.

Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited, Hertz Netherlands and the direct and indirect subsidiary companies located outside of the U.S.

and Canada (collectively the "International Subsidiaries") (some of which were waived or amended, subject to certain time limitations, as disclosed further below), and (ii) HVF, HVF II, HFLF and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

Non-Vehicle Debt

Senior Secured Superpriority Debtor-in-Possession Credit Agreement

On October 15, 2020, Hertz entered into a commitment letter for debtor-in-possession financing with the holders of a majority in aggregate outstanding amount of its Pre-petition first-lien debt (collectively, the “Initial Commitment Parties”) pursuant to which the Initial Commitment Parties committed to backstop the DIP Credit Agreement in an aggregate amount of $ 1.65 billion, subject to the terms and conditions set forth in the initial commitment letter.

The initial commitment letter was amended on October 28, 2020 to add certain additional commitment parties.

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

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 (collectively, the "DIP Debtors"), entered into the DIP Credit Agreement with the financial institutions identified therein as lenders and Barclays Bank PLC as administrative agent.

The DIP Credit Agreement provides for DIP Loans, of which (i) up to $ 1.0 billion can be used as equity for new interim fleet financing, giving the DIP 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.

The DIP Credit Agreement matures on December 31, 2021 and has limited covenants and events of default, including one milestone requiring the filing of a plan of reorganization by August 1, 2021.

The DIP Credit Agreement will be secured by first priority liens on substantially all of the DIP Debtors’ assets (subject to certain exclusions) and has the support of the requisite majority of the DIP Debtors’ first lien Pre-petition debt to allow for consensual priming of existing liens.

The DIP Credit Agreement does not contain a roll-up or cross-collateralization of Pre-petition debt or otherwise dictate how Pre-petition claims will be addressed in a plan of reorganization.

The DIP Credit Agreement includes customary negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the loan parties and their subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans or advances, engage in mergers, consolidations, sales of assets and acquisitions, pay dividends and distributions and make payments in respect of junior or Pre-petition indebtedness, in each case subject to customary exceptions for debtor-in-possession loan agreements of this type.

The DIP Credit Agreement also includes conditions precedent, representations and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings of this type.

Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, the appointment of a trustee pursuant to Chapter 11, and certain other events related to the impairment of the lenders’ rights or liens granted under the DIP Credit Agreement.

In November 2020, the Company drew $ 250 million from the DIP Credit Agreement and Hertz utilized $ 50 million of the draw to make a capital contribution to HVIF in order to pay fees associated with the issuance of the HVIF Series 2020-1 Notes, as defined below.

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

First Lien Credit Agreement

Pursuant to the Plan of Reorganization, on the Effective Date, Hertz entered into a credit agreement (the "First Lien Credit Agreement") that provides for the following:

• Term B Loan for term loans in an aggregate principal amount of $ 1.3 billion;

• Term C Loan for term loans that are available to cash collateralize letters of credit in an aggregate principal amount of $ 245 million;

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

Proceeds received on the Effective Date, as a result of the Plan of Reorganization, under the First Lien Credit Agreement were used to (i) repay certain existing indebtedness of the Debtors;

(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 or replace existing letters of credit.

Term B Loan and Term C Loan (collectively, the "Term Loans") :

The Term Loans bear interest based on an alternate base rate as per the First Lien Credit Agreement or adjusted LIBOR, in each case plus an applicable margin of (i) 2.25 % in the case of the alternate base rate, or (ii) 3.25 % in the case of the adjusted LIBOR.

In each case, the margin may change depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio").

The Term Loans include provisions for a transition to an alternative benchmark index other than LIBOR.

The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $ 3.3 million per quarter beginning on September 30, 2021 until maturity.

The Term Loans mature on June 30, 2028.

First Lien RCF :

The First Lien RCF bears interest, at a benchmark rate plus spread.

Loans under the facility are available in various currencies including USD, Eurodollar, Australian dollar, Canadian dollar and Sterling.

Benchmark rates for the relevant currencies include, the relevant LIBOR rate, the Prime rate, the Bank Bill Swap Reference Bid Rate for Australian dollars, Canadian prime rate, an adjusted Canadian Dollar Offered Rate ("CDOR") or the Daily Simple Sterling Overnight Index Average ("SONIA").

ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50 %.

The First Lien RCF includes provisions for a transition to an alternative benchmark index other than LIBOR.

The margin for Euro currency Loans (including USD loans), SONIA loans and Canadian dollar BA Equivalent Loans, as defined in the First Lien Credit Agreement, is dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement.

As of December 31, 2021, that margin was 3.00 %.

In each case, the margin may change depending on Hertz’s Total Corporate Leverage Ratio.

The First Lien RCF matures on June 30, 2026.

2021 Senior Notes

In November 2021, Hertz issued $ 1.5 billion of unsecured senior notes consisting of $ 500 million Senior Notes Due 2026 and $ 1.0 billion Senior Notes Due 2029.

The Senior Notes Due 2026 and the Senior Notes Due 2029 are Hertz's 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 all outstanding shares of Hertz Global's Series A Preferred Stock.

See Note 16, "Equity and Mezzanine Equity – Hertz Global."

HERTZ GLOBAL HOLDINGS, INC.

1 unchanged sentence

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In August 2019, Hertz issued $ 500 million in aggregate principal amount of 7.125 % Senior Notes due August 2026 (the "2026 Notes").

Hertz utilized proceeds from the issuance of the 2026 Notes, together with net proceeds from the Rights Offering, as described in Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global," to redeem all $ 700 million of the outstanding 5.875 % Senior Notes due 2020 and all $ 500 million of the outstanding 7.375 % Senior Notes due 2021.

In November 2019, Hertz issued $ 900 million in aggregate principal amount of 6.000 % Senior Notes due January 2028 (the "2028 Notes").

Hertz utilized proceeds from the issuance of the 2028 Notes, together with available cash, to redeem $ 900 million in aggregate principal amount of its outstanding 7.625 % Senior Second Priority Secured Notes due 2022 (the "Senior Second Priority Secured Notes").

The governing documents of certain of the vehicle debt financing arrangements specified below contain covenants that, among other things, significantly limit or restrict (or upon certain circumstances may significantly restrict or prohibit) the ability of the borrowers/issuers, and the guarantors if applicable, to make certain restricted payments (including paying dividends, redeeming stock, making other distributions, loans or advances) to Hertz Holdings and Hertz, whether directly or indirectly.

To the extent applicable, aggregate maximum borrowings are subject to borrowing base availability.

There is subordination within certain series of vehicle debt based on class.

Proceeds from the issuance of vehicle debt is typically used to acquire or refinance vehicles or to repay portions of outstanding principal amounts of vehicle debt with an earlier maturity.

HVF II, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF II U.S.

HVF II has entered into a base indenture that permits it to issue term and revolving rental vehicle asset-backed securities, secured by one or more shared or segregated collateral pools consisting primarily of portions of the rental vehicles used in the Company's U.S.

vehicle rental operations and contractual rights related to such vehicles that have been allocated as the ultimate indirect collateral for HVF II's financings.

Within each series of HVF II U.S.

Vehicle Medium Term Notes there is subordination based on class.

The assets of HVF II and HVF II GP Corp.

are owned by HVF II and HVF II GP Corp., respectively, and are not available to satisfy the claims of Hertz’s general creditors.

As a result of the amortization event, proceeds from the sales of vehicles that collateralize the notes issued by HVF II must be primarily applied to the payment of principal and are allocated on what approximates a pro rata basis to the reduction of principal on the basis of seniority by class.

As disclosed in Note 1, "Background," per the terms of the Interim Lease Order entered on July 24, 2020, the Debtors, as directed, made $ 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.

On January 20, 2021, the Bankruptcy Court entered the Second Lease Order, which directed the Debtors, among other things, to make $ 756 million of base 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.

The parties have agreed to defer litigation related to the Operating Lease until September 30, 2021.

HVF II is accruing default interest on the HVF II Variable Funding Notes and accruing non-default interest on the U.S.

Vehicle Medium Term Notes.

Non-default interest is being paid on the HVF II Variable Funding Notes and the U.S.

Vehicle Medium Term Notes from funds drawn on existing letter of credit facilities, as described below.

Vehicle Variable Funding Notes

HVF II Series 2013-A Notes:

In February 2019, HVF II extended the maturities of $ 3.4 billion of existing commitments under the HVF II Series 2013-A Notes from March 2020 to March 2021, added $ 400 million in new

DIP Credit Agreement

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

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 were debtors in the Chapter 11 Cases, as guarantors (collectively, the "DIP Debtors"), entered into the DIP Credit Agreement.

The DIP Credit Agreement provided for DIP Loans, of which (i) up to $ 1.0 billion could be used as equity for new interim fleet financing, which gave the DIP Debtors the ability to replenish their vehicle fleet, and (ii) up to $ 800 million could be used for working capital and general corporate purposes and had limited covenants and events of default, including one milestone that required the filing of a plan of reorganization by August 1, 2021.

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

On the Effective Date, in accordance with the Plan of Reorganization, the DIP Credit Agreement was paid in full and terminated.

Senior Facilities

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

Senior Notes and Senior Second Priority Secured Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Company's Senior Notes and Senior Second Priority Secured Notes were paid in full and terminated.

Promissory Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Promissory Notes were paid in full and terminated.

Alternative Letter of Credit Facility

On the Effective Date, in accordance with the Plan of Reorganization, the Alternative Letter of Credit Facility was paid in full and terminated.

HIL Credit Agreement

In April 2021, Hertz International Limited ("HIL") entered into a multi-draw term loan facility (the "HIL Credit Agreement") which provided an aggregate maximum principal of € 250 million to meet the liquidity requirements of the European business.

In May 2021, resulting from a change in the Company's plan of reorganization sponsorship, the HIL Credit Agreement was terminated and HIL entered into a new multi-draw term loan facility (the "Second HIL Credit Agreement") which also provided for an aggregate maximum principal of € 257 million that was funded by certain of the Plan Sponsors.

On the Effective Date, in accordance with the Plan of Reorganization, the Second HIL Credit Agreement was paid in full and terminated.

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(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

commitments and terminated the HVF II Series 2013-B Notes, transitioning $ 300 million in commitments to the HVF II Series 2013-A Notes.

In May 2019, HVF II increased the commitments of the HVF II Series 2013 Notes by $ 40 million such that after giving effect to such commitments the maximum principal amount was approximately $ 4.1 billion.

In February 2020, HVF II extended the maturity of the Series 2013-A Notes from March 2021 to March 2022 and increased the commitments thereunder by $ 750 million.

After giving effect to the transactions, the aggregate maximum principal amount of the Series 2013-A Notes was $ 4.9 billion, where $ 0.2 billion of commitments have a maturity of March 2021.

Vehicle Medium Term Notes

HVF II Series 2019-1 Notes:

In February 2019, HVF II issued the Series 2019-1 Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D in an aggregate principal amount of $ 745 million.

HVF II Series 2019-2 Notes:

In May 2019, HVF II issued the Series 2019-2 Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D in an aggregate principal amount of $ 799 million.

HVF II Series 2019-3 Notes:

In November 2019, HVF II issued the Series 2019-3 Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D in an aggregate principal amount of $ 800 million.

The Class D notes initially were purchased by an affiliate of HVF II and in December 2019, were sold to a third party.

HVF II Series 2017-2 and Various Series 2018 and 2019 Class D Notes :

In March 2020, HVF II sold the below notes to third parties, which it had acquired at the time of the respective initial offerings and which were previously eliminated in consolidation.

(In millions) Aggregate Principal Amount

HVF II Series 2017-2 Class D Notes $ 20

HVF II Series 2018-1 Class D Notes 58

HVF II Series 2018-2 Class D Notes 13

HVF II Series 2018-3 Class D Notes 13

HVF II Series 2019-1 Class D Notes 45

HVF II Series 2019-2 Class D Notes 49

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

In accordance with the Bankruptcy Court's order, on November 25, 2020, HVIF issued the Series 2020-1 Rental Car Asset Backed Notes, Class A and Class B (collectively, the "HVIF Series 2020-1 Notes") in an aggregate principal amount of $ 4.0 billion to unaffiliated third parties.

The HVIF Series 2020-1 Notes are comprised of $ 3.5 billion aggregate principal amount of Series 2020-1 3.00 % Class A Notes and $ 500 million aggregate principal of Series 2020-1 3.75 % Class B Notes.

The HVIF Series 2020-1 Notes have a maturity date of November 24, 2021.

The Class B Notes are subordinated to the Class A Notes.

There were no notes issued as of December 31, 2020.

In June 2021, Hertz established a securitization platform, the HVF III U.S.

ABS Program, to facilitate its financing activities relating to vehicles used by Hertz in the U.S.

daily vehicle rental operations.

HVF III, a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF III U.S.

HVF III entered into a base indenture that permits it to issue term and variable funding rental car asset-backed securities, secured by a collateral pool consisting primarily of the rental vehicles used in the Company's U.S.

vehicle rental operations and the related incentive and repurchase program vehicle receivables.

Within each series of HVF III U.S.

Vehicle Medium Term Notes, the issued notes are subordinated based on class.

Pursuant to the Plan of Reorganization, in June 2021, HVF III issued Series 2021-A Variable Funding Rental Car Asset Backed Notes (the "Series 2021-A Notes"), the Series 2021-1 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-1 Notes") and the Series 2021-2 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-2 Notes" and, together with the Series 2021-A Notes and the Series 2021-1 Notes, the “HVF III Series 2021 Notes”).

HVF III Series 2021-A Notes:

In June 2021, Hertz issued the Series 2021-A Class A Notes with a maximum principal amount of up to $ 2.8 billion.

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

The HVF III Series 2021- A Notes have a maturity date of June 2023.

HVF III Series 2021-1 Notes :

On the Effective Date, Hertz issued the Series 2021-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 2.0 billion.

There is subordination within the Series 2021-1 Notes based on class.

HVF III Series 2021-2 Notes:

On the Effective Date, Hertz issued the Series 2021-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 2.0 billion.

There is subordination within the Series 2021-2 Notes based on class.

In June 2021, in connection with the issuance of the HVF III Series 2021 Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.

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, as described below, and (ii) approximately $ 2.2 billion in aggregate outstanding principal of notes issued by Hertz Vehicle Interim Financing, a direct wholly-owned bankruptcy remote subsidiary of Hertz ("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 to be leased under the Operating Lease.

HVF III Series 2022 Notes

In January 2022, Hertz issued the Series 2022-1 Notes and the Series 2022-2 Notes in an aggregate principal amount of $ 1.5 billion.

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 to be leased under the Operating Lease.

HVF III Series 2022-1 Notes :

In January 2022, Hertz issued the Series 2022-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 750 million.

There is subordination within the

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The HVIF Series 2020-1 Notes are restricted to be drawn upon if the utilization of the vehicles that serve as collateral falls below 55 %.

HFLF, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Donlen is the issuer under the Donlen U.S.

HFLF has entered into a base indenture that permits it to issue term and revolving vehicle lease asset-backed securities.

Donlen utilizes the HFLF securitization platform to finance its U.S.

vehicle leasing operations.

The notes issued by HFLF are ultimately backed by a special unit of beneficial interest in a pool of leases and the related vehicles.

References to the “Donlen U.S.

ABS Program” include HFLF’s Variable Funding Notes together with HFLF’s Medium Term Notes.

The filing of the Chapter 11 Cases triggered an amortization event under the HFLF Variable Funding Notes and the HFLF Medium Term Notes.

As a result, the remaining commitments under the HFLF Series 2013-2 Notes were terminated and, while the amortization events continue, proceeds from lease payments and from the sales of vehicles that collateralize the notes issued by HFLF must be applied to the reduction of principal and payment of interest on the notes.

The principal will be allocated on approximately a pro rata basis and distributed to the note holders on the basis of seniority by class.

HFLF is accruing default interest on the HFLF Variable Funding Notes, while non-default interest is being paid on the HFLF Variable Funding Notes and the HFLF Medium Term Notes.

HFLF Variable Funding Notes

In February 2020, HFLF amended the HFLF Series 2013-2 Notes to extend the end of the revolving period from March 2021 to March 2022 and increased the commitments thereunder by $ 100 million, such that the aggregate maximum borrowings of the HFLF Series 2013-2 Notes increased to $ 600 million.

As a result of the pending sale of the Donlen Assets, the amount outstanding of $ 316 million has been classified as liabilities held for sale in the accompanying consolidated balance sheet as of December 31, 2020, as disclosed in Note 3, "Divestitures."

HFLF Medium Term Notes

HFLF Series 2019-1 Notes :

In May 2019, HFLF issued the Series 2019-1 Asset Backed Notes, Class A, Class B, Class C, Class D and Class E in an aggregate principal amount of $ 650 million.

The HFLF Series 2019-1 Notes are fixed rate, except for the Class A-1 Notes, which are floating rate and carry an interest rate based upon a spread to one-month LIBOR.

As a result of the pending sale of the Donlen Assets, the amount outstanding of $ 734 million has been classified as liabilities held for sale in the accompanying consolidated balance sheet as of December 31, 2020, as disclosed in Note 3, "Divestitures."

DFLF Variable Funding Notes

On October 12, 2020, the Bankruptcy Court entered an order authorizing Hertz and Donlen to enter into certain agreements in connection with DFLF.

On October 16, 2020, DFLF issued the Series 2020-1 Notes to offset funding needs created by the amortization of the HFLF Variable Funding Notes, where DFLF will fund lease originations going forward.

As of December 31, 2020, DFLF has access to up to $ 400 million of available funding, subject to certain conditions, and $ 300 million of committed funding available which increases by a minimum of $ 50 million per month, subject to the payment of incremental up-front fees.

As a result of the pending sale of the Donlen Assets, the amount outstanding of $ 250 million has been classified as liabilities held for sale in the accompanying consolidated balance sheet as of December 31, 2020, as disclosed in Note 3, "Divestitures."

Series 2022-1 Notes based on class.

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 :

In January 2022, Hertz issued the Series 2022-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 750 million.

There is subordination within the Series 2022-2 Notes based on class.

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.

On the Effective Date, in accordance with the Plan of Reorganization, all HVF II U.S.

Vehicle Medium Term Notes and HVF II U.S Vehicle Variable Funding Notes were paid in full and terminated.

Any and all outstanding Bankruptcy Court orders and other agreements relating to HVF II were terminated on the Effective Date as a result of the termination of the notes.

On the Effective Date, in accordance with the Plan of Reorganization, the HVIF Series 2020-1 was paid in full and terminated.

Vehicle Debt-Other

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of the Company's existing debt obligations, as described below.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Vehicle Revolving Credit Facility

In August 2020, Hertz terminated the U.S.

vehicle revolving credit facility by utilizing available cash to pay in full amounts outstanding of $ 93 million.

European Vehicle Notes

The European Vehicle Notes are the primary vehicle financing facility for the Company's vehicle rental operations in Italy, Belgium and Luxembourg and finances a portion of its assets in the United Kingdom, France, The Netherlands, Spain and Germany.

The agreements governing the European Vehicle Notes contain covenants that apply to the Hertz credit group similar to those for the Senior Notes.

The terms of the European Vehicle Notes permit Hertz Netherlands to incur additional indebtedness that would be pari passu with the European Vehicle Notes.

Hertz Netherlands and certain other international subsidiaries entered into a limited forbearance and lock-up agreement (the “Lock-up Agreement”), as extended, in respect of the European Vehicle Notes pursuant to which the majority noteholders agreed not to take action in respect of any default or event of default that could have resulted from the Chapter 11 Cases, in order to support a transaction set-forth in the Lock-up Agreement, and to be implemented by a scheme of arrangement (subject to conditions and approvals), subsequent to the waiver expiration on December 31, 2020.

The transaction set out in the Lock-up Agreement is intended to be implemented by a UK Scheme of Arrangement and is expected to comprise (i) an issuance of € 250.0 million in new notes to certain European Vehicle Notes lenders for cash by Hertz International Limited (the “HIL Notes”);

(ii) an on-lending of the proceeds from the HIL Notes to Hertz Netherlands;

(iii) a bifurcation of the existing guarantee claims under the European Vehicle Notes, which would then be auctioned, and the amount owing on the European Vehicle Notes would be reduced by the proceeds from the sale of the existing guarantee claims;

and (iv) an extension of the maturity and an alteration of the European Vehicle Notes terms which may include a further reduction of amounts owing (amounts and final terms are dependent upon the level of participation of existing European Vehicle Notes holders in the lending for the HIL Notes).

The UK Scheme of Arrangement was approved by the requisite majority of European Vehicle Notes creditors.

The guarantee bifurcation from Hertz is subject to approval by the Bankruptcy Court and the intention is to have the UK Scheme of Arrangement recognized in the U.S.

under Chapter 15 of the Bankruptcy Code.

A Bankruptcy Court hearing has been scheduled for March 2021.

On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were paid in full and terminated.

The European ABS is the primary vehicle financing facility for the Company's vehicle rental operations in France, the Netherlands, Germany and Spain.

The lenders under the European ABS have been granted a security interest in the owned rental vehicles used in the Company's vehicle rental operations in these countries and certain contractual rights related to such vehicles.

An amortization event, that would have arisen under the European ABS as a result of filing the Chapter 11 Cases, was waived in May 2020 as International Fleet Financing No.2 B.V (“IFF No.

2”) entered into a waiver agreement as extended which expires on March 5, 2021 or earlier if certain conditions are not met (the "European Waiver").

Under the European Waiver, aggregate maximum borrowings were not to exceed (i) € 201 million from January 29, 2021 to February 11, 2021, (ii) € 187 million from February 12, 2021 to February 18, 2021 and (iii) € 180 million from and including February 19, 2021.

In April 2021, International Fleet Financing No.

2 BV ("IFF No.

2") entered into a comprehensive restructuring of the European ABS.

The terms of the restructured European ABS provide for aggregate maximum borrowings of € 450 million and extend the maturity to April 2022.

In accordance with the Plan of Reorganization, the guarantees provided by Hertz relating to the restructured European ABS, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

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 connection with the amendment, Hertz entered into a performance guarantee with respect to certain obligations of certain of its subsidiaries in their capacities as lessees, servicers and administrators under the European ABS.

Hertz Canadian Securitization

TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz (“Funding LP”), is the issuer under the Hertz Canadian Securitization.

The Hertz Canadian Securitization was established to facilitate financing activities relating to the vehicles used by the Company in the Canadian daily vehicle rental operations.

The lenders under the Hertz Canadian Securitization have been granted a security interest primarily in the owned rental vehicles used in the Company's vehicle rental operations in Canada and certain contractual rights related to such vehicles as well as certain other assets owned by the Hertz entities

On January 27, 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A Notes which provides for aggregate maximum borrowings of CAD$ 350 million on a revolving basis, subject to availability under the borrowing base limitation.

The initial draw was used, in part, to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest.

As a result of the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

connected to the financing.

In connection with the establishment of the Hertz Canadian Securitization, Funding LP issued the Series 2015-A Variable Funding Rental Car Asset Backed Notes (the “Funding LP Series 2015-A Notes”) that provided for aggregate maximum borrowings of CAD$ 350 million on a revolving basis.

The filing of the Chapter 11 Cases triggered an amortization event under the Hertz Canadian Securitization.

As a result, the remaining committed available borrowings were terminated and proceeds from the sales of vehicles and receipt of vehicle receivables that collateralize the Hertz Canadian Securitization must be applied to the payment of principal.

On September 23, 2020, Funding LP entered into an interim agreement under the Hertz Canadian Securitization in which default interest will be paid.

On January 13, 2021, the Bankruptcy Court entered an order authorizing the Debtors to enter into a new series under the Hertz Canadian Securitization, Funding LP Series 2021-A Notes.

On January 27, 2021, Funding LP entered into aggregate maximum borrowings of CAD$ 350 million on a revolving basis, subject to availability under the borrowing base limitation.

The initial draw was used, in part, to pay outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest.

As a result of the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.

Donlen Canadian Securitization

In December 2019, Donlen established a new securitization platform (the "Donlen Canadian Securitization") to finance its Canadian vehicle leasing operations.

The Donlen Canadian Securitization provides for aggregate maximum borrowings of CAD$ 50 million on a revolving basis and a maturity of December 2022.

As a result of the pending sale of the Donlen Assets, the amount outstanding of $ 27 million has been classified as liabilities held for sale in the accompanying consolidated balance sheet as of December 31, 2020, as disclosed in Note 3, "Divestitures."

The filing of the Chapter 11 Cases triggered an event of default under the Donlen Canadian Securitization.

Donlen entered into a waiver agreement, as extended, under the Donlen Canadian Securitization with an expiration date of the earlier of April 27, 2021 or the closing of the Donlen Asset Sale, in which the aggregate maximum borrowings were reduced from CAD$ 50 million to CAD$ 37 million.

Australian Securitization

2 unchanged sentences

The lender under the Australian Securitization has been granted a security interest primarily in the owned rental vehicles used in its vehicle rental operations in Australia and certain contractual rights related to such vehicles.

An amortization event that would have arisen under the Australian Securitization as a result of filing the Chapter 11 Cases was waived in May 2020 as HA Fleet Pty Limited, an indirect, wholly-owned subsidiary of Hertz, entered into a permanent waiver agreement under the Australian Securitization such that the aggregate maximum borrowing capacity was reduced from AUD$ 270 million to AUD$ 210 million.

New Zealand Revolving Credit Facility

An amortization event that would have arisen under the Australian Securitization as a result of the filing of the Chapter 11 Cases was waived in May 2020, and in June 2021, such waiver was superseded by an amendment of the Australian Securitization.

The terms of the amended Australian Securitization provide for aggregate maximum borrowings of AUD$ 210 million and extend the maturity to April 2022.

In accordance with the Plan of Reorganization, the guarantees provided by Hertz relating to the restructured Australian Securitization, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

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.

New Zealand RCF

Hertz New Zealand Holdings Limited, an indirect wholly-owned subsidiary of Hertz, is the borrower under a credit agreement that provides for aggregate maximum borrowings on a revolving basis under an asset-based revolving credit facility (the “New Zealand RCF”).

The New Zealand RCF is the primary vehicle financing facility for its vehicle rental operations in New Zealand.

In September 2019, Hertz New Zealand Holdings Limited amended the New Zealand RCF to increase the aggregate maximum borrowings from NZD$ 60 million to NZD$ 75 million and extended the maturity from March 2020 to June 2021.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2021, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to provide for aggregate maximum borrowings of NZD$ 60 million and to extend the maturity to June 2022.

Financing Facility

In May 2019, Hertz U.K.

Limited amended its credit agreement ("U.K.

Financing Facility") to, among other things, extend the maturity of the aggregate maximum borrowing capacity of £ 250 million to March 2021.

In April 2020, the aggregate maximum borrowing capacity under the U.K.

Financing Facility was reduced from £ 250 million to £ 200 million as a result of a downgrade in the credit rating of Hertz.

Events of default that would have arisen under the U.K.

Financing Facility as a result of filing the Chapter 11 Cases were waived as Hertz U.K.

Limited entered into a waiver agreement, as extended, which expires on March 5, 2021, or earlier if certain conditions are not met (the "UK Waiver").

Under the UK Waiver, the aggregate maximum borrowing capacity under the U.K.

Financing Facility was reduced to £ 85 million.

Financing Facility as a result of filing the Chapter 11 Cases were waived in May 2020 (as amended from time to time), and, in April 2021, such waivers were superseded by a comprehensive restructuring of the U.K.

Financing Facility.

The terms of the restructured U.K.

Financing Facility provide for aggregate maximum borrowings of £ 100 million and extend the maturity to April 2022.

In accordance with the Plan of Reorganization, guarantees provided by Hertz relating to the restructured U.K.

Financing Facility, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

Toyota Financing Facility

In May 2021, Hertz U.K.

Limited entered into the U.K.

Toyota Financing Facility to finance the acquisition of certain motor vehicles which provides for aggregate maximum borrowings of £ 10 million maturing, upon extension, in June 2022.

Loss on Extinguishment of Debt

The Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements.

Losses on extinguishment of debt are presented in vehicle and non-vehicle interest expense, net, as applicable in the accompanying statements of operations.

The following table reflects the amount of losses for each respective redemption/termination:

Loss on extinguishment of debt is presented in Reorganization items, net, unless otherwise noted in the table below, in the accompanying consolidated statements of operations.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table reflects the amount of loss for each respective redemption/termination:

Years Ended December 31,

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Non-Vehicle Debt

HIL Credit Agreement (1)

Second HIL Credit Agreement 5 — —

Total Non-Vehicle Debt 13 — —

Non-Vehicle Debt (subject to compromise)

Senior Term Loan 16 — —

Senior RCF 22 — —

Senior Notes 29 — —

Senior Second Priority Secured Notes (2)

Promissory Notes 2 — —

Alternative Letter of Credit Facility 7 — —

Letter of Credit Facility 8 — —

5.875 % Senior Notes due 2020 (2)

7.375 % Senior Notes due 2021 (2)

7.625 % Senior Second Priority Secured Notes due 2022

Total Non-Vehicle Debt — 43 —

Vehicle Debt:

HVF II Series 2017-A — — 2

4.375 % European Vehicle Notes due 2019

Total Non-Vehicle Debt (subject to compromise) 88 — 43

Vehicle Variable Funding Notes 9 — —

Vehicle Medium Term Notes 39 — —

HVIF II Series 2020-1 21 — —

European Vehicle Notes 29 — —

European ABS (3)

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Total Loss on Extinguishment of Debt $ 199 $ 5 $ 43

As of December 31, 2020, the nominal amounts of maturities of debt, including non-vehicle debt subject to compromise, for each of the years ending December 31 are as follows:

(1) The loss on extinguishment is recorded in non-vehicle interest expense, net in the accompanying consolidated income statement for the year ended December 31, 2021.

(2) The loss on extinguishment incurred in 2019 was recorded in non-vehicle interest expense, net in the accompanying consolidated income statement for the year ended December 31, 2019.

(3) The loss on extinguishment was recorded in vehicle interest expense, net in the accompanying consolidated income statement for the year ended December 31, 2020.

As of December 31, 2021, the nominal amounts of maturities of debt for each of the years ending December 31 are as follows:

(In millions) 2022 2023 2024 2025 2026 After 2026

Non-Vehicle Debt $ 20 $ 20 $ 15 $ 13 $ 513 $ 2,474

$ 1,016 $ 870 $ 633 $ 801 $ — $ 1,427

Vehicle Debt 311 3,617 2,026 — 2,000 —

1,732 2,466 1,183 706 — —

Total $ 331 $ 3,637 $ 2,041 $ 13 $ 2,513 $ 2,474

(1) Includes Non-Vehicle Debt of $ 4.4 billion included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020, and as the expected maturity date is subject to the outcome of the Chapter 11 Cases, the original, legal maturity dates are reflected in this table.

(2) The stated, contractual maturity dates are reflected in this table except for $ 362 million of notes where the maturity date has expired as of December 31, 2020 and as such, is included in the 2021 column in this table.

As HVF II is in an amortization event, its expected maturity dates may change as described above.

As of December 31, 2020, $ 1.0 billion of non-vehicle debt, of which $ 760 million is included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020, and $ 1.7 billion of vehicle

The Company has reviewed its debt facilities and determined that it is probable that the Company will be able, and has the intent, to refinance these facilities at such times as the Company determines appropriate prior to their respective maturities.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

debt is set to mature in 2021 which does not reflect any potential changes to the Company's debt that may result from the Chapter 11 Cases.

Borrowing Capacity and Availability

Borrowing capacity and availability comes from the Company's revolving credit facilities.

As a result of the filing of the Chapter 11 Cases, almost all of the Company's revolving credit facilities were terminated, as disclosed in the following table.

The remaining revolving credit facilities are a combination of cash flow based revolving credit facilities and asset-based revolving credit facilities.

Borrowing capacity and availability comes from the Company's revolving credit facilities, which are a combination of variable funding asset-backed securitization facilities, cash-flow based revolving credit facilities, asset-based revolving credit facilities and the First Lien RCF.

Creditors under each such asset-backed securitization facility and asset-based revolving credit facility have a claim on a specific pool of assets as collateral.

With respect to each such asset-backed securitization facility and asset-based revolving credit facility, the Company refers to the amount of debt it can borrow given a certain pool of assets as the borrowing base.

The Company refers to "Remaining Capacity" as the maximum principal amount of debt permitted to be outstanding under the respective facility (i.e., with respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the amount of debt the Company could borrow assuming it possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under such facility.

With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding under such facility (i.e., the amount of debt that can be borrowed given the collateral possessed at such time).

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Non-Vehicle Debt

Senior RCF (1)

Senior Secured Superpriority Debtor-in-Possession Credit Agreement 1,400 1,400

Letter of Credit Facility (1)

Alternative Letter of Credit Facility (1)

First Lien RCF $ 925 $ 925

Total Non-Vehicle Debt 925 925

Vehicle Variable Funding Notes (1)

HVIF Series 2020-1 4,000 10

HVF III Series 2021-A — —

European ABS 456 —

2 unchanged sentences

Financing Facility 37 —

Toyota Financing Facility 5 —

New Zealand RCF 2 —

1 unchanged sentence

Total $ 1,531 $ 925

(1) As a result of the filing of the Chapter 11 Cases, there is no longer remaining capacity or availability under these facilities, as such unused commitments were terminated.

Letters of Credit

The Letter of Credit Facility consists of $ 400 million of commitments from the issuing banks party thereto and matures on June 30, 2021.

The Alternative Letter of Credit Facility consists of $ 250 million of unsecured commitments from the issuing banks party thereto and matures on December 20, 2023.

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, the Company provided 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 remains no capacity to issue additional letters of credit under the Term C Loan.

Such letters of credit have been issued primarily to support the Company's insurance programs, vehicle rental

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As of December 31, 2020, there were outstanding standby letters of credit totaling $ 740 million.

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

Of this amount, $ 225 million were issued under the Senior RCF, $ 299 million were issued under the Letter of Credit Facility and $ 200 million were issued under the Alternative Letter of Credit Facility.

As of December 31, 2020, $ 17 million and $ 114 million of the issued letters of credit have been drawn upon under the Senior RCF and Alternative Letter of Credit Facility, respectively, to fund interest payments due under the HVF II Notes.

The draws remain unreimbursed by the Company, and, except as otherwise set forth in orders from the Bankruptcy Court, as a result are accruing interest at the non-default rate.

Special Purpose Entities

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

None of the value of such assets (including the assets owned by Hertz Vehicle Financing II LP, HVF II GP Corp., Hertz Vehicle Financing LLC, Rental Car Finance LLC and various international subsidiaries that facilitate the Company's international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

concessions and leaseholds as well as to provide credit enhancement for its asset-backed securitization facilities.

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

Pledges Related to Vehicle Financing

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

The Company has a 25 % ownership interest in IFF No.

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As of December 31, 2021 and 2020, IFF No.

2 had total assets of $ 464 million and $ 1.1 billion, respectively, primarily comprised of loans receivable, and total liabilities of $ 464 million and $ 1.1 billion, respectively, primarily comprised of debt.

2 had total assets of $ 734 million and $ 464 million, respectively, comprised primarily of loans receivable, and total liabilities of $ 733 million and $ 464 million, respectively, comprised primarily of debt.

Covenant Compliance

Prior to the filing of the Chapter 11 Cases, Hertz’s consolidated first lien net leverage ratio (the "Leverage Ratio"), as defined in the credit agreements governing the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, as of the last day of any fiscal quarter may not exceed a ratio of 3.00 to 1.00.

As a result of the filing of the Chapter 11 Cases, the Company is currently in default under its Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility, and the Company is in breach of the Leverage Ratio.

The DIP Credit Agreement requires a liquidity maintenance test of $ 275 million, as defined in the DIP Credit Agreement, as of each month end period.

As of December 31, 2020, Hertz was in compliance with the liquidity maintenance test.

The First Lien Credit Agreement requires Hertz 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, Hertz was 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, the Company was in compliance with all covenants in the First Lien Credit Agreement.

Accrued Interest

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Restricted Net Assets

As a result of the contractual restrictions on Hertz's or its subsidiaries' ability to pay dividends (directly or indirectly) under various terms of its debt, as of December 31, 2020, the restricted net assets of the subsidiaries of Hertz and Hertz Global exceed 25 % of their total consolidated net assets, respectively.

Note 7 — Revenue from Contracts with Customers

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In the Revenue Recognition section of Note 2, “Significant Accounting Policies”, the Company discloses that revenue earned from vehicle rentals and from other forms of rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, are accounted for under Topic 842, which the Company adopted in accordance with the effective date on January 1, 2019.

Prior to the adoption of Topic 842, the Company accounted for such revenue under Topic 606 for the year ended December 31, 2018.

The following disclosures are in accordance with Topic 606 for the year ended December 31, 2018.

See Note 10, "Leases" for disclosures in accordance with Topic 842 for the years ended December 31, 2020 and 2019.

The Company operates at airport rental locations in the U.S.

and internationally ("airport") and at off airport locations also in the U.S.

and internationally ("off airport").

The Company's airport rental customers are primarily airline travelers;

whereas the Company's off airport rental customers include people who prefer to rent vehicles closer to their home or place of work for business or leisure purposes, as well as those needing to travel to or from airports.

The Company's off airport customers also include people who have been referred by, or whose rental costs are being wholly or partially reimbursed by, insurance companies following accidents in which their vehicles were damaged, those expecting to lease vehicles that are not yet available from their leasing companies and replacement renters.

In addition, the Company's off airport customers include TNC drivers.

The following table presents revenues from contracts with customers by reportable segment and disaggregated by product/service and type of location and customer for the year ended December 31, 2018:

Year Ended December 31, 2018

(In millions) U.S.

Rental Car International Rental Car All Other Operations Consolidated

Vehicle rental and rental related:

Airport $ 4,465 $ 1,288 $ — $ 5,753

Off airport 1,881 842 — 2,723

Total vehicle rental and rental related 6,346 2,130 — 8,476

Licensee revenue 32 145 — 177

Ancillary retail vehicle sales 102 1 — 103

Fleet management — — 45 45

Total other 134 146 45 325

Total revenue from contracts with customers $ 6,480 $ 2,276 $ 45 $ 8,801

The Company recognizes receivables and liabilities resulting from its contracts with customers.

Contract receivables primarily consist of receivables from customers for vehicle rentals.

Contract liabilities primarily consist of obligations to customers for prepaid vehicle rentals and related to the Company’s points-based loyalty programs.

The contract liability balance as of December 31, 2018 is $ 341 million and is included in accrued liabilities in the accompanying consolidated balance sheet.

The revenue recognized during the year ended December 31, 2018 for such contract liabilities is $ 127 million.

Additionally, the Company elected to apply the practical expedient where the value of unsatisfied performance obligations for sales-based royalty fees from franchisees is not disclosed.

During the year ended December 31, 2018, based on the net impact of loyalty points earned and redeemed by customers, the Company recorded a net revenue deferral of $ 7 million.

As of December 31, 2018, the value of unredeemed loyalty points is $ 272 million, which is recorded as a contract liability in accrued liabilities in the accompanying consolidated balance sheet.

As a result of the contractual restrictions on Hertz and certain of its subsidiaries' ability to pay dividends (directly or indirectly) under various terms of its debt, as of December 31, 2021, the restricted net assets of the subsidiaries of Hertz and Hertz Global exceed 25 % of their total consolidated net assets, respectively.

Note 7— Employee Retirement Benefits

The Company sponsors multiple domestic and international employee retirement benefit plans where benefits are based upon years of service and compensation.

The Hertz Corporation Account Balance Defined Benefit Pension Plan (the “Hertz Retirement Plan”) is a U.S.

cash balance plan, which was amended in 2014 to permanently

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8— Employee Retirement Benefits

The Company sponsors multiple domestic and international employee retirement benefit plans.

Benefits are based upon years of service and compensation.

The Hertz Corporation Account Balance Defined Benefit Pension Plan (the “Hertz Retirement Plan”) is a U.S.

cash balance plan which was amended in 2014 to permanently discontinue future benefit accruals and participation under the plan for non-union employees.

Additionally, the Company sponsors the Hertz Corporation Benefit Equalization Plan ("BEP") and the Hertz Corporation Supplemental Executive Retirement Plans (together with the BEP, the "Supplemental Plans"), where benefit accruals and participation under the Supplemental Plans were discontinued by the Company effective December 31, 2014.

discontinue future benefit accruals and participation under the plan for non-union employees.

The majority of union employees have since discontinued participation in the Hertz Retirement Plan as the result of collective bargaining.

Some of the Company’s international subsidiaries have defined benefit retirement plans or participate in various insured or multiemployer plans.

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employees, where contributions are matched based on specific guidelines in the plans.

The Company also sponsors postretirement health care and life insurance benefits for a limited number of employees with hire dates prior to January 1, 1990.

Accordingly, the Company sponsors postretirement health care and life insurance benefits for a limited number of employees with hire dates prior to January 1, 1990.

Management makes certain assumptions relating to discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates and other factors when determining amounts to be recognized.

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Prior service cost is amortized on a straight-line basis from the date recognized over the average remaining service period of active participants, when applicable.

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," participants of the Supplemental Plans are no longer entitled to benefit payments and are considered general creditors of the Company.

As such, the Company classified $ 24 million of its U.S.

pension benefit obligation as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

Additionally, the Company previously sponsored the Hertz Corporation Benefit Equalization Plan ("BEP") and the Hertz Corporation Supplemental Executive Retirement Plans (together with the BEP, the "Supplemental Plans").

The Supplemental Plans were rejected in the Company's Chapter 11 Cases and terminated in connection with the Plan of Reorganization.

As a result, participants in the Supplemental Plans were no longer entitled to benefit payments and were considered general creditors of the Company.

As of December 31, 2020, the Company classified $ 24 million of its U.S.

pension benefit obligation as liabilities subject to compromise in its accompanying consolidated balance sheet which were paid through the claim settlement process in 2021.

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The following tables set forth the funded status and the net periodic pension cost of the Hertz Retirement Plan and other U.S.

based retirement plans, other postretirement benefit plans including health care and life insurance plans covering domestic (i.e.

U.S.) employees and the retirement plans for international operations (“Non-U.S.”), together with amounts included in the accompanying consolidated balance sheets and statements of operations:

based retirement plans, other postretirement benefit plans including health care and life insurance plans covering domestic (i.e., U.S.) employees and the retirement plans for international operations (“Non-U.S.”), together with amounts included in the accompanying consolidated balance sheets and statements of operations:

Pension Benefits Postretirement

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Foreign currency exchange rate translation — — ( 7 ) 17 — —

Actuarial loss (gain) 41 59 42 33 1 1

Actuarial (gain) loss ( 16 ) 41 ( 20 ) 42 — 1

Benefit obligation as of December 31 (1)

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Fair value of plan assets as of January 1 $ 488 $ 503 $ 258 $ 228 $ — $ —

Actual return (loss) gain on plan assets 74 84 28 29 — —

Actual return gain on plan assets 9 74 4 28 — —

Company contributions 24 2 5 4 1 1

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Plan assets less than benefit obligation $ 3 $ ( 34 ) $ ( 52 ) $ ( 82 ) $ ( 12 ) $ ( 12 )

(1) Participants of the Supplemental Plans are no longer entitled to benefit payments and are considered general creditors of the Company.

(1) As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," participants of the Supplemental Plans were no longer entitled to benefit payments as of December 31, 2020 and were considered general creditors of the Company.

As such, the Company classified $ 24 million of its U.S.

pension benefit obligation as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

In 2020 and 2019, discount rates decreased, resulting in actuarial losses for the U.S.

In 2021, discount rates increased, resulting in actuarial gains for the U.S.

pension and postretirement plans.

In addition, the Non-U.S.

pension plans were revalued on new census data in 2021 resulting in an additional gain, which was mostly offset by a loss from an increase in the inflation assumption.

In 2020, discount rates decreased, resulting in actuarial losses for the U.S.

pension and postretirement plans.

In addition, an increase in the inflation assumption in 2020 resulted in an actuarial loss in the Non-U.S.

pension plans.

pension plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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N/A - Not applicable

(1) Participants of the Supplemental Plans are no longer entitled to benefit payments and are considered general creditors of the Company.

(1) As a result of filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," participants of the Supplemental Plans were no longer entitled to benefit payments as of December 31, 2020 and were considered general creditors of the Company.

As such, the Company classified $ 24 million of its U.S.

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The discount rate used to determine the December 31, 2021 and 2020 benefit obligations for U.S.

pension plans is based on the rate from the Mercer Pension Discount Curve-Above Mean Yield that is appropriate for the duration of the Company's plan liabilities.

For its plans outside the U.S., the discount rate reflects the market rates for an optimized subset of high-quality corporate bonds currently available.

The discount rate in a country was determined based on a yield curve constructed from high quality corporate bonds in that country.

pension plans was based on the rate from the Mercer Pension Discount Curve-Above Mean Yield that is appropriate for the duration of the Company's plan liabilities.

For its plans outside the U.S., the discount rate reflected the market rates for an optimized subset of high-quality corporate bonds currently available with the discount rate in a country determined based on a yield curve constructed from high quality corporate bonds in that country.

The rate selected from the yield curve has a duration that matches its plan.

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The following table sets forth the net periodic pension and postretirement (including health care, life insurance and auto) expense charged to net income (loss).

The components of net periodic pension expense (benefit), other than service cost, are included in other (income) expense, net in the accompanying consolidated statements of operations.

The components of net periodic pension expense (benefit), other than service cost, were included in other (income) expense, net in the accompanying consolidated statements of operations.

Pension Benefits Postretirement

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Derivatives - Interest Rate 3 2 — 3 — —

Derivatives - Credit — — — — 1 —

Non-Investment Grade Fixed Income (2)

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Plan") has a target allocation of 30 % actively managed diversified growth and multi-asset credit funds, 10 % passive equity funds and 60 % protection portfolio that consists of liability driven investments, Sterling liquidity fund and United Kingdom corporate bonds.

The actively managed diversified growth and multi-asset credit funds are intended to deliver a long-term equity-like

The actively managed diversified growth and multi-asset credit funds are intended to deliver a long-term equity-like return but with reduced levels of volatility.

The protection portfolio is designed to partially hedge the interest rate and inflation expectation exposure of the liabilities which are measured on a local regulatory basis.

The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the

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return but with reduced levels of volatility.

The protection portfolio is designed to partially hedge the interest rate and inflation expectation exposure of the liabilities which are measured on a local regulatory basis.

The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the value of the liabilities change and the allocations within the protection portfolio will be allowed to vary accordingly.

value of the liabilities change and the allocations within the protection portfolio will be allowed to vary accordingly.

All of the invested assets of the U.K.

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The Company's U.K.

Plan accounts for $ 251 million of the $ 258 million in fair value of Non-U.S.

plan assets as of December 31, 2020 and accounts for $ 221 million of the $ 228 million in fair value of Non-U.S.

Plan comprises $ 248 million of the $ 255 million in fair value of Non-U.S.

plan assets as of December 31, 2021 and comprises $ 251 million of the $ 258 million in fair value of Non-U.S.

plan assets as of December 31, 2020.

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Total fair value of pension plan assets $ 24 $ 186 $ 38 $ 24 $ 190 $ 37

(1) Includes certain investments where the fair value measurement utilizes the net asset value (NAV) and as such, are not classified in the fair value levels above.

(1) Includes certain investments where the fair value measurement utilizes NAV and as such, are not classified in the fair value levels above.

(2) The Level 2 investments relate to investment funds that publish daily NAV per unit.

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The Company made discretionary contributions of $ 3 million to its U.K.

Plan during the years ended December 31, 2020 and 2019.

The Company does not anticipate contributing to the U.S.

Plan during each of the years ended December 31, 2021 and 2020.

The Company does no t anticipate contributing to the U.S.

qualified pension plan during 2022.

Plan the Company anticipates contributing $ 3 million during 2021 and does not anticipate contributing any significant amounts to its other international plans.

The Company does not anticipate contributing any significant amounts to the U.K.

Plan and anticipates contributing $ 2 million to its other international plans 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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2022 $ 33 $ 3

After 2025 217 3

2027 to 2031 206 3

Multiemployer Pension Plans

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The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.

Amounts accrued for benefit payments under the Company's multiemployer pension plans of $ 2 million have been classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

Amounts accrued for benefit payments under the Company's multiemployer pension plans of $ 20 million represent the net present value of the projected liabilities from withdrawal claims as of December 31, 2021.

The Company's participation in multiemployer plans is outlined in the table below.

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(1) Indicates whether a Funding Improvement Plan, as required under the Code to be adopted by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the plan year that ended in 2021.

(2) Included in the Other Plans are contributions to the Local 1034 Pension Fund.

The amount contributed by Hertz to the Local 1034 Pension Fund was reported as being more than 5 % of total contributions to the plan on the fund's Form 5500 for the year ended December 31, 2019.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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The stock-based compensation expense associated with the Hertz Holdings stock-based compensation plans is pushed down from Hertz Global and recorded on the books at the Hertz level.

In May 2016, Old Hertz Holdings board of directors adopted the Hertz Global Holdings, Inc.

2016 Omnibus Incentive Plan (the “Omnibus Plan”), which was amended by its stockholders at the annual meeting of stockholders held on May 24, 2019 to increase the number of shares which can be granted under the plan by 2,490,000 shares.

As amended, the Omnibus Plan contains 11,767,723 shares which can be granted pursuant to the terms and conditions of the Omnibus Plan.

In connection with the Rights Offering, as disclosed in Note 17, “Equity and Earnings (Loss) Per Share - Hertz Global”, and pursuant to the Omnibus Plan, the number of shares which can be granted under the plan was increased by an additional 453,741 shares in 2019.

The Omnibus Plan provides for grants of both equity and cash awards, including non-qualified stock options, incentive stock options, stock appreciation rights, performance awards (shares and units), restricted stock, restricted stock units and deferred stock units to key executives, employees and non-management directors.

The shares of common stock to be delivered under the Omnibus Plan may consist, in whole or in part, of common stock held in treasury or authorized but unissued shares of common stock, not reserved for any other purpose.

As of December 31, 2020, the Company had 2,694,399 shares underlying awards outstanding under the Omnibus Plan.

Shares subject to any award (other than distribution awards) granted under the Omnibus Plan that for any reason are canceled, terminated, forfeited, settled in cash or otherwise settled without the issuance of common stock after the effective date of the Omnibus Plan will generally be available for future grants under the Omnibus Plan.

A summary of the total compensation expense and associated income tax benefits recognized, including the cost of stock options, RSUs, PSUs, and PSAs is as follows:

2021 Omnibus Incentive Plan

During the fourth quarter of 2021, Hertz Global's Board approved the Hertz Global Holdings, Inc.

2021 Omnibus Incentive Plan (the “2021 Omnibus Plan").

The 2021 Omnibus Plan is intended to satisfy the requirement as provided in the Plan of Reorganization to adopt a new management incentive equity plan.

In accordance with the Plan of Reorganization, the Company is initially authorized to issue up to 62,250,055 shares of its common stock pursuant to awards granted under the 2021 Omnibus Plan.

In addition, beginning on June 30, 2022, and ending on June 20, 2031 (an “Evergreen Date”), the total authorized shares under the 2021 Omnibus Plan will automatically increase by a number of shares equal to 2 % of the total number of shares of the Company's common stock outstanding on the June 29th immediately preceding the applicable Evergreen Date.

Notwithstanding the foregoing, the Company's Board may act prior to the Evergreen Date of a given year to provide that there will be no automatic increase for such year, or that the increase for such year will be a lesser number of shares.

As of December 31, 2021, 56,840,434 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan.

During the year ended December 31, 2021, compensation expense of $ 7 million and a related income tax benefit of $ 2 million was recognized for grants made under the 2021 Omnibus Plan.

As of December 31, 2021, there was $ 105 million of total unrecognized compensation cost expected to be recognized over the remaining 2.8 years, on a weighted average basis, of the requisite service period that began on the grant dates.

The 2021 Omnibus Plan provides for the award of stock options, stock appreciation rights ("SARs"), performance stock, PSUs, performance units ("PUs"), restricted stock, RSUs, share awards and deferred stock units to eligible recipients.

Under the 2021 Omnibus Plan, the Compensation Committee of the Board (the "Compensation Committee") has the authority to determine the eligible recipients to whom awards may be granted, the types of awards and their terms or conditions.

Stock Options and SARs

The 2021 Omnibus Plan provides that stock option grants may be either incentive stock options or non-statutory stock options, however, the Company may not grant incentive stock options until such time as the plan has been approved by the Company's stockholders.

Except in the case of replacement awards, stock options will have an exercise price per share that is no less than fair market value of the Company's common stock on the stock option grant date.

SARs may be granted to participants in tandem with stock options or on their own.

Unless otherwise determined by the Compensation Committee at or after the grant date, tandem SARs will have substantially similar terms as the stock options with which they are granted.

Generally, each SAR will entitle the participant upon exercise to an amount (in cash, shares or a combination of cash and shares, as determined by the Compensation Committee) equal to the product of (i) the excess of (A) the fair market value on the exercise date of one share of common stock, over (B) the strike price per share, times (ii) the number of shares of common stock covered by the SAR.

The Company accounts for stock options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period.

The value of each stock option award is estimated on the grant date using a Black-Scholes option valuation model that incorporates the assumptions noted in the following table.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company calculates the expected volatility based on the historical movement of its stock price.

Assumption 2021

Expected volatility 75 %

Expected dividend yield — %

Expected term (years) 6

Risk-free interest rate 1.19 %

Weighted-average grant date fair value $ 17.12

A summary of stock option activity under the 2021 Omnibus Plan as of December 31, 2021 is presented below:

Options Shares Weighted

Price Weighted-

Term (years) Aggregate Intrinsic

Value (In millions)

Outstanding as of January 1, 2021 — $ — — $ —

Granted 3,682,215 26.17 — —

Exercised — — — —

Forfeited or Expired ( 3,360 ) 26.17 — —

Outstanding as of December 31, 2021 3,678,855 26.17 9.9 —

Exercisable as of December 31, 2021 — — — —

Non-vested as of December 31, 2021 3,678,855

Performance Stock Awards, Performance Stock Units and Performance Units

PSAs, PSUs and PUs granted under the 2021 Omnibus Plan will vest based on the achievement of predetermined performance goals over performance periods determined by the Compensation Committee or upon the occurrence of certain events, as determined by the Compensation Committee.

PSAs are awards of common stock that are subject to forfeiture until predetermined performance conditions have been achieved.

A PSU is a contractual right to receive a stated number of shares of common stock, or if provided by the Compensation Committee on or after the grant date, cash equal to the fair market value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, which right is forfeitable until the achievement of predetermined performance conditions.

PUs represent the right to receive a cash denominated award, payable in cash or shares of common stock or a combination thereof, and are forfeitable until the achievement of predetermined performance conditions.

As of December 31, 2021, there were no issued or outstanding grants of PSAs, PSUs or PUs under the 2021 Omnibus Plan.

Restricted Stock and Restricted Stock Units

Restricted stock and RSUs granted under the Omnibus Plan will vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee.

Restricted stock and RSUs are subject to forfeiture until vested.

Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period.

For grants issued in 2021, the vesting period is three years except for 500,000 shares which will vest in the first half of 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of RSU activity as of and for the year ended December 31, 2021 under the 2021 Omnibus Plan is presented below:

Shares Weighted-

Fair Value Aggregate Intrinsic

Value (In millions)

Outstanding as of January 1, 2021 — $ — $ —

Granted 1,727,406 26.17 —

Forfeited or Expired ( 1,120 ) 26.17 —

Outstanding as of December 31, 2021 1,726,286 26.17 43

Additional information pertaining to RSU activity under the 2021 Omnibus Plan was as follows:

Years Ended December 31,

Total fair value of awards that vested (in millions) $ —

Weighted-average grant-date fair value of awards 26.17

Deferred Stock Units

Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date.

During the year ended December 31, 2021, there were approximately 24,000 outstanding shares of deferred stock units under the 2021 Omnibus Plan.

2016 Omnibus Incentive Plan

On the Effective Date, in accordance with the Plan of Reorganization, all existing common stock and outstanding equity awards under the 2016 Omnibus Incentive Plan (the "2016 Omnibus Plan") were cancelled without any distribution, and the 2016 Omnibus Plan was deemed to be cancelled.

As a result, the Company recognized $ 10 million related to the unrecognized portion of share-based compensation under the terminated 2016 Omnibus Plan in reorganization expense during the second quarter of 2021, which is reflected in the Company's consolidated statement of operations for the year ended December 31, 2021.

See Note 21, "Reorganization Items, Net."

As amended, the 2016 Omnibus Plan contained 11,767,723 shares which were available to grant pursuant to the terms and conditions of the 2016 Omnibus Plan before its termination on the Effective Date.

A summary of the total compensation expense and associated income tax benefits recognized for the 2016 Omnibus Plan, including the cost of stock options, RSUs, PSUs and PSAs is as follows:

Years Ended December 31,

(In millions) 2021 2020 2019

Compensation expense $ ( 2 ) $ 18 $ 14

Income tax benefit — ( 2 ) ( 3 )

Compensation expense (credit) $ 3 $ ( 2 ) $ 18

Income tax provision (benefit) ( 1 ) — ( 2 )

Total $ 2 $ ( 2 ) $ 16

As of December 31, 2020, there was approximately $ 8 million of total unrecognized compensation cost related to non-vested stock options, RSUs, PSUs and PSAs granted.

The total unrecognized compensation cost is expected to be recognized over the remaining 1.1 years, on a weighted average basis, of the requisite service period that began on the grant dates.

Stock Options and Stock Appreciation Rights

All stock options and stock appreciation rights granted under the Omnibus Plan will have a per-share exercise price of not less than the fair market value of one share of Hertz Global's common stock on the grant date.

Stock options and stock appreciation rights will vest based on a minimum period of service or the occurrence of events (such as a change in control, as defined in the Omnibus Plan) specified by the Compensation Committee of the Company's Board.

No stock options or stock appreciation rights will be exercisable after a maximum of ten years from the grant date.

The Company accounts for options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period.

The value of each option award is estimated on the grant date using a Black-Scholes option valuation model that incorporates the assumptions noted in the following table.

As of December 31, 2021, there was no unrecognized compensation cost related to the 2016 Omnibus Plan as the plan was deemed cancelled on the Effective Date.

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The Company calculates the expected volatility based on the historical movement of its stock price.

Stock Options and SARs

All stock options and SARs granted under the 2016 Omnibus Plan had a per-share exercise price of not less than the fair market value of one share of Hertz Global's common stock on the grant date.

Stock options and SARs vested based on a minimum period of service or the occurrence of events (such as a change in control, as defined in the 2016 Omnibus Plan) specified by the Compensation Committee of the Board.

No stock options or SARs were exercisable after a maximum of ten years from the grant date.

The Company accounted for stock options as equity-classified awards and recognized compensation cost on a straight-line basis over the vesting period.

The value of each option award was estimated on the grant date using a Black-Scholes option valuation model that incorporated the assumptions noted in the following table.

The Company calculated the expected volatility based on the historical movement of its stock price.

Assumption 2021 (1)

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Weighted-average grant date fair value $ — $ — $ 9.19

(1) There were no options approved to be granted by the Company's Compensation Committee in 2020.

(2) Options granted in 2019 are solely related to the incremental grants awarded as part of the Rights Offering, as disclosed in Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global."

A summary of option activity as of December 31, 2020 is presented below:

(1) There were no options approved to be granted by the Compensation Committee in 2021 or 2020.

(2) Options granted in 2019 were solely related to the incremental grants awarded as part of the 2019 Rights Offering, as disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global."

A summary of stock option activity under the 2016 Omnibus Plan as of December 31, 2021 is presented below:

Options Shares Weighted

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Forfeited or Expired (1)

( 99,038 ) 34.76 — —

Outstanding as of December 31, 2021 — — — —

Exercisable as of December 31, 2021 — — — —

A summary of non-vested option activity as of December 31, 2020 is presented below:

(1) Includes all remaining outstanding stock options that were deemed to be cancelled on the Effective Date.

A summary of non-vested stock option activity under the 2016 Omnibus Plan as of December 31, 2021 is presented below:

Shares Weighted-

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Granted — — —

Vested ( 19,664 ) 17.97 8.93

Forfeited ( 434,525 ) 18.34 9.39

Forfeited or expired (1)

( 23,249 ) 18.07 9.06

Non-vested as of December 31, 2021 — — —

Additional information pertaining to option activity under the plans is as follows:

(1) Includes all outstanding non-vested stock options that were deemed to be cancelled on the Effective Date.

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Additional information pertaining to stock option activity under the 2016 Omnibus Plan is as follows:

Years Ended December 31,

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Performance Stock Awards, Performance Stock Units, Restricted Stock and Restricted Stock Units

PSAs and PSUs granted under the Omnibus Plan will vest based on the achievement of pre-determined performance goals over performance periods determined by the Compensation Committee.

Each of the units

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granted represent the right to receive one share of Hertz Global's common stock on a specified future date.

In the event of an employee's death or disability, a pro rata portion of the employee's PSAs and PSUs will vest to the extent performance goals are achieved at the end of the performance period.

Restricted stock and RSUs granted under the Omnibus Plan will vest based on a minimum period of service or the occurrence of events (such as a change in control, as defined in the Omnibus Plan) specified by the Compensation Committee.

On August 4, 2020, in recognition of the Chapter 11 Cases, all long-term incentive plans were frozen and as such, no shares will be distributed upon vesting (the "Equity Vesting Event").

As a result, none of the 2018, 2019 or 2020 unvested PSA, PSU and RSU equity awards will vest.

The 2020 threshold performance achievement set forth in these 2018, 2019 and 2020 PSU awards also failed to be met due to the COVID-19 pandemic impact on our financial results, and as a result, no PSU shares will be distributed upon vesting.

A summary of the PSU and PSA activity as of December 31, 2020 is presented below:

The 2020 threshold performance achievement set forth in the 2018, 2019 and 2020 PSU awards under the 2016 Omnibus Plan failed to be met due to the COVID-19 pandemic impact on the Company's financial results.

Additionally, on August 4, 2020, in recognition of the Chapter 11 Cases, all long-term incentive plans were frozen and as such, no additional common shares of the Company could be issued for PSA, PSU, or RSU equity awards under the 2016 Omnibus Plan.

A summary of the PSU and PSA activity as of December 31, 2021 under the 2016 Omnibus Plan is presented below:

Shares Weighted-

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Granted — — —

Vested ( 75,288 ) 20.15 —

Forfeited or Expired (1)

( 1,813,305 ) 16.47 —

Outstanding as of December 31, 2021 — — —

A summary of RSU activity as of December 31, 2020 is presented below:

(1) Included all outstanding PSUs and PSAs under the 2016 Omnibus Plan that were deemed to be cancelled on the Effective Date.

A summary of RSU activity as of and for the year ended December 31, 2021 under the 2016 Omnibus Plan is presented below:

Shares Weighted-

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Granted — — —

Vested ( 396,749 ) 19.07 —

Forfeited or Expired (1)

( 782,056 ) 15.11 —

Outstanding as of December 31, 2021 — — —

Additional information pertaining to RSU activity is as follows:

(1) Included all outstanding RSUs under the 2016 Omnibus Plan that were deemed to be cancelled on the Effective Date.

Additional information pertaining to RSU activity under the 2016 Omnibus Plan is as follows:

Years Ended December 31,

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Weighted-average grant date fair value of awards — 12.18 18.66

Compensation expense for PSUs, PSAs and RSUs is based on the grant date fair value, and is recognized ratably over the vesting period.

For grants in 2020, 2019 and 2018, the vesting period is three years .

In addition to the service vesting condition, the PSUs and PSAs had an additional vesting condition which called for the number of units that will be awarded being based on achievement of a certain level of Operating Income, Adjusted Corporate EBITDA or other performance measures over the applicable measurement period.

As a result of the Equity Vesting Event, none of the 2018, 2019 or 2020 unvested PSA, PSU and RSU shares will be distributed upon vesting.

Note 10— Leases

The Company adopted Topic 842 in accordance with the effective date on January 1, 2019.

In the Revenue Recognition section of Note 2, “Significant Accounting Policies, the Company discloses that revenue earned from

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vehicle rentals and from other forms of rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, is accounted for under Topic 842.

Prior to the adoption of Topic 842, the Company accounted for such revenue under Topic 606 for the year ended December 31, 2018.

Note 9— Leases

The Company adopted Topic 842 in accordance with the effective date on January 1, 2019.

In the Revenue Recognition section of Note 2, "Significant Accounting Policies," the Company discloses that revenue earned from vehicle rentals and from other forms of rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset, is accounted for under Topic 842.

The Company enters into certain agreements as a lessor under which it rents vehicles and leases fleets to customers.

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The Company mitigates residual value risk of its revenue earning vehicles by utilizing manufacturer repurchase and guaranteed depreciation programs, using sophisticated vehicle diagnostic and repair equipment to maintain the condition of its vehicles and through periodic reviews of vehicle depreciation rates based on management's ongoing assessment of present and estimated future market conditions.

The Company's operating leases for fleets have lease periods that are typically for twelve months, after which the lease converts to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter.

The Company's fleet leases contain a terminal rental adjustment clause which are considered variable charges.

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019:

Prior to the Donlen Sale on March 30, 2021, as further disclosed in Note 3, "Divestitures," the Company had operating leases for fleets as part of its Donlen business which had lease periods that were typically for twelve months, after which the lease converted to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter.

These leases contained terminal rental adjustment clauses which were considered variable charges.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In millions) 2021 2020 2019

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If the implicit interest rate cannot be determined in the lease agreement, the Company utilizes the Company's collateralized incremental borrowing rate as of the date of adoption, January 1, 2019, or the commencement date of the lease, whichever is later.

As a result of the impact from COVID-19 as disclosed in Note 1, "Background," the Company received rent concessions in the form of abatement and payment deferrals of fixed and variable rent payments for its airport and off airport locations in the amount of approximately $ 300 million during the year ended December 31, 2020, which substantially represents amounts previously due in 2020.

The Company elected to apply the accounting relief provided by the FASB and elected to not evaluate whether the concession is a modification.

The Company will account for the concession as if it were part of the existing contract.

In 2020, the Bankruptcy Court entered the Lease Rejection Orders which applied, in the aggregate, to 359 off airport and 66 airport locations in the Company's U.S.

The Company elected to apply the accounting relief provided by the FASB and elected to not evaluate whether the concession was a modification.

The Company accounted for the concession as if it was part of the existing contract.

In 2021 and 2020, the Bankruptcy Court entered the Lease Rejection Orders which applied, in the aggregate, to 278 and 359 off airport locations, respectively, and to 34 and 66 airport locations, respectively, in the Company's Americas RAC segment.

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The following table summarizes the amount of lease costs incurred by the Company:

The following table summarizes the amount of lease costs incurred by the Company for the years ended December 31, 2021, 2020 and 2019:

Years ended December 31,

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Minimum fixed lease costs:

Short-term lease costs $ 142 $ 130 N/A

Operating lease costs 527 545 N/A

Short-term lease costs $ 171 $ 142 $ 130

Operating lease costs 449 527 545

Total 620 669 $ 675

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$ 785 $ 692 $ 1,001

(1) Topic 842, which was adopted on January 1, 2019, requires the Company to disclose the short-term portion of minimum fixed lease costs.

For the year ended December 31, 2018, under the then existing guidance in Topic 840, the Company was only required to disclose minimum fixed costs in total.

The following summarizes the weighted-average remaining lease term and weighted-average discount rate for the Company's operating leases as a lessee:

December 31, 2020

The following summarizes the weighted-average remaining lease term and weighted-average discount rate for the Company's operating leases as a lessee as of December 31, 2021:

Weighted-average remaining lease term (in years) 11.8

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Interest ( 1,026 )

Operating lease liabilities at December 31, 2020 $ 1,636

Operating lease liabilities as of December 31, 2021 $ 1,510

Note 10— Restructuring

Due to the impact from COVID-19 as disclosed in Note 1, "Background," the Company initiated a restructuring program beginning in April 2020, affecting approximately 11,000 employees in its U.S.

Rental Car segment and corporate operations and incurred approximately $ 37 million of charges for termination benefits during the second quarter of 2020, where $ 7 million was classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020 as disclosed below.

Europe Restructuring

Due to the continued impact from COVID-19 as disclosed in Note 1, "Background," and reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment.

The total number of employees affected for the year ended December 31, 2021 was approximately 900 .

The program is expected to be completed in 2022.

Restructuring

Due to the impact from COVID-19 as disclosed in Note 1, "Background," the Company initiated a restructuring program beginning in April 2020, affecting approximately 11,000 U.S.

employees in its Americas RAC segment and corporate operations.

This program was substantially completed in the third quarter of 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables summarize restructuring charges incurred under this program:

(In millions) Year Ended December 31, 2020

Termination charges:

Restructuring Charges

Restructuring charges under these programs are as follows:

Years ended December 31,

(In millions) 2021 2020

Termination benefits $ 27 $ 37

Lease and contract terminations 3 $ —

Facility closures 2 —

Total $ 32 $ 37

Years ended December 31,

(In millions) 2021 2020

Direct vehicle and operating $ 16 $ 25

Selling, general and administrative 16 12

(In millions) Year Ended December 31, 2020

Termination charges:

Rental Car Segment $ 34

Total $ 32 $ 37

Years ended December 31,

(In millions) 2021 2020

Americas RAC segment $ — $ 34

International RAC segment 32 —

Corporate operations — 3

Total $ 32 $ 37

The tables above do not include pension-related settlement charges incurred during the year ended December 31, 2020.

See Note 7, "Employee Retirement Benefits."

The following table summarizes the activity affecting the restructuring accrual, which is recorded in accrued liabilities or was reclassified to liabilities subject to compromise in the accompanying consolidated balance sheet, during the year ended December 31, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the activity affecting the restructuring accrual, which is recorded in accrued liabilities or, for the year ended December 31, 2020, reclassified to liabilities subject to compromise in the accompanying consolidated balance sheet.

(In millions) Termination

Benefits Other Total

Balance as of December 31, 2019 $ 1 $ — $ 1

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Cash payments ( 29 ) — ( 29 )

Liabilities subject to compromise (1)

Classified to liabilities subject to compromise (1)

( 7 ) — ( 7 )

Other ( 2 ) — ( 2 )

Balance as of December 31, 2020 — — —

(1) As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company classified $ 7 million of restructuring charges as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

Charges incurred 27 5 32

Cash payments ( 32 ) — ( 32 )

Other non-cash reductions — ( 3 ) ( 3 )

Reclassified from liabilities subject to compromise (1)

Balance as of December 31, 2021 $ 2 $ 2 $ 4

(1) As a result of filing the Chapter 11 Cases, the Company classified $ 7 million of restructuring charges to liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

On the Effective Date, in connection with the Plan of Reorganization, the Company reclassified $ 7 million of accrued and unpaid restructuring charges from liabilities subject to compromise.

See Note 20, "Liabilities Subject to Compromise."

Note 11— Income Tax (Provision) Benefit

On March 27, 2020, the U.S.

federal government passed the CARES Act.

The Company has considered the income tax provisions of the CARES Act in the tax benefit calculation for the year ended December 31, 2020.

Under the CARES Act, Alternative Minimum Tax ("AMT") credit refunds are accelerated and fully refundable in tax returns through the year 2019.

As a result of this provision, the Company recovered its remaining AMT credit as a refund in the amount of $ 20 million in the year ended December 31, 2020.

The Company also benefited from the provisions of the CARES Act related to the employee retention credit, payroll tax deferral, the increase in the interest expense limitation, and temporary suspension of the NOL percentage utilization limitation.

On December 22, 2017, the U.S.

enacted the TCJA, which made substantial changes to corporate income tax laws.

Among the key provisions were a U.S.

corporate tax rate reduction from 35 % to 21 % effective for tax years beginning January 1, 2018;

an acceleration of expensing for certain business assets;

a repeal of the LKE deferral rules as applicable to personal property, including rental vehicles;

a one-time transition tax on the deemed

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repatriation of cumulative earnings from foreign subsidiaries;

and changes to U.S.

taxation of foreign earnings from a worldwide to a territorial tax system effective for tax years beginning January 1, 2018.

The Company has reflected the adoption and impact of TCJA in its financial results for all years following enactment.

The components of income (loss) before income taxes for the Company's domestic and foreign operations were as follows:

The components of income (loss) before income taxes for the Company's domestic and foreign operations are as follows:

As of December 31,

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Total income (loss) before income taxes $ 1,474 $ ( 2,183 ) $ 20

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The total income tax provision (benefit) consists of the following:

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Total provision (benefit) - Hertz $ 318 $ ( 328 ) $ 65

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The principal items of the U.S.

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Net operating loss carry forwards

Capital loss carryforwards 167 3

Federal and state tax credit carry forwards 64 55

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$ ( 1,003 ) $ ( 724 )

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Hertz Global and Hertz

In determining valuation allowances, an assessment of positive and negative evidence was performed regarding realization of the deferred tax assets.

This assessment included the evaluation of cumulative earnings and losses in recent years, scheduled reversals of deferred tax liabilities, the availability of carry forwards and the remaining period of the respective carry forward, future taxable income and any applicable tax-planning strategies that are available.

This assessment included the evaluation of cumulative earnings and losses in recent years, scheduled reversals of deferred tax liabilities, the availability of carryforwards and the remaining period of the respective carry forward, future taxable income and any applicable tax-planning strategies that are available.

As of December 31, 2021, the Company has U.S.

federal net operating loss carryforwards ("Federal NOLs") of approximately $ 4.0 billion, $ 839 million tax effected and federal tax credits of approximately $ 28 million.

Our Federal NOLs are driven by U.S.

operational losses and have an indefinite carryforward period, which may offset 80% of taxable income generated in any future year.

Federal NOLs have an indefinite carryforward period, which may offset 80% of taxable income generated in any future year.

The federal tax credits begin expiring in 2035.

The Company has not recorded a valuation allowance on its Federal NOLs or federal tax credits as there are adequate U.S.

The Company has not recorded a valuation allowance on its Federal NOLs or federal tax credits as there were adequate U.S.

deferred tax liabilities that could be realized within the carry forward periods.

As of December 31, 2020, the Company had state net operating loss carry forwards ("State NOLs") of approximately $ 4.1 billion of which $ 550 million have an indefinite utilization period with remaining State NOLs beginning to expire in 2021.

During 2021 as part of a restructuring of the European operations, we generated a tax loss of approximately $ 1.3 billion, which was characterized as a capital loss in the 2021 provision.

Separately, the company generated approximately $ 600 million of taxable capital gains on the disposition of the Donlen Corporation.

As a result, the Company has approximately $ 670 million, $ 141 million U.S, federal tax-effected, of capital loss carryforward for which a full valuation allowance is recorded.

The Company has filed a request for a pre-filing agreement with the Internal Revenue Service to determine whether the capital loss on European restructuring qualifies as an ordinary loss.

As of December 31, 2021, the Company has state net operating loss carryforwards ("State NOLs") of approximately $ 4.8 billion of which $ 1.0 billion have an indefinite utilization period with remaining State NOLs beginning to expire in 2022.

The tax effected State NOLs are recorded as a deferred tax asset in the amount of $ 245 million, and are offset, in part, by a valuation allowance totaling $ 171 million.

In addition, as of December 31, 2020, the Company has approximately $ 31 million in state tax credits that are fully offset by a valuation allowance.

In addition, as of December 31, 2021, the Company had approximately $ 35 million in state tax credits that are fully offset by a valuation allowance.

The state tax credits expire over various years beginning in 2022 depending upon when they were generated and the particular jurisdiction.

We evaluated the positive and negative evidence supporting realization of the State NOLs and state tax credits on a tax filing basis.

We recorded valuation allowances in those jurisdictions with a history of cumulative losses and no other sources of taxable income, including deferred tax liabilities or tax planning strategies, sufficient to conclude the State NOLs and credits are more-likely-than-not to be realized.

As of December 31, 2021, the Company has foreign net operating loss carry forwards ("Foreign NOLs") of approximately $ 1.0 billion, of which $ 911 million have an indefinite utilization period with the remaining Foreign NOLs beginning to expire in 2024.

The tax effected Foreign NOLs are recorded as a deferred tax asset of $ 239 million, and are offset by valuation allowances totaling $ 239 million.

In addition, as of December 31, 2021, the Company has no tax credits in foreign jurisdictions.

Due to the ownership changes before and upon emergence form Chapter 11, the utilization of the Company's Federal, State and Foreign NOLs may be subject to limitations.

Estimates of these limitations have been reflected in the tax provision.

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As of December 31, 2020, the Company had foreign net operating loss carry forwards ("Foreign NOLs") of approximately $ 1.3 billion, of which $ 1.1 billion have an indefinite utilization period with the remaining Foreign NOLs beginning to expire in 2024.

The tax effected Foreign NOLs are recorded as a deferred tax asset of $ 332 million, and are offset, in part, by valuation allowances totaling $ 303 million.

In addition, as of December 31, 2020, the Company has approximately $ 1 million of tax credits in foreign jurisdictions and are fully offset by a valuation allowance.

The foreign tax credits have an indefinite utilization period.

We evaluated the positive and negative evidence supporting realization of the Foreign NOLs and foreign tax credits on a tax filing basis.

We recorded valuation allowances in those jurisdictions with a history of cumulative losses and no other sources of taxable income, including deferred tax liabilities or tax planning strategies, sufficient to conclude the Foreign NOLs or foreign credits were more-likely-than-not to be realized.

The Company's Federal, State and Foreign NOLs may be subject to limitations upon an ownership change before or upon emergence from Chapter 11.

The significant items in the reconciliation of the statutory and effective income tax rates consisted of the following items in the table below.

The significant items in the reconciliation of the statutory and effective income tax rates consists of the following items in the table below.

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

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Statutory federal tax rate 21 % 21 % 21 %

State and local income taxes, net of federal effect 7 5 ( 102 )

Change in state rates, net of federal effect 2 1 ( 17 )

Foreign tax rate differential — — ( 31 )

State and local income taxes, net of federal income tax benefit

Change in state apportionment and statutory rates, net of federal income tax benefit

Tax reform — — ( 9 )

Change in foreign statutory rates ( 2 ) — 15

Federal and foreign permanent differences 1 — ( 3 )

Tax credits ( 1 ) — ( 75 )

Withholding taxes 1 — 62

Valuation allowance 11 ( 11 ) 591

Change in fair value of public warrants 22 — —

Non-deductible bankruptcy expenses 15 — —

European reorganization ( 46 ) — —

Uncertain tax positions 12 — 29

Change in valuation allowance ( 11 ) 591 ( 5 )

Change in foreign statutory rates — 15 ( 3 )

Tax credits — ( 75 ) 7

tax on foreign earnings 2 — —

Stock option shortfalls — — 7

All other items, net — 3 1

Effective tax rate - Hertz Global 47 16 500

All other items, net rate impact applicable to Hertz Holdings ( 1 ) ( 174 ) ( 1 )

Hertz Holdings exclusive items ( 25 ) ( 1 ) ( 174 )

Effective tax rate - Hertz 22 % 15 % 326 %

The Company recorded a tax benefit in 2020 versus a tax provision in 2019.

The change is primarily due to significant losses in 2020 resulting from the effect of COVID-19, offset, in part, by the impact of valuation allowances on net deferred tax assets.

The Company recorded a tax provision in 2019 versus a tax benefit in 2018.

The change is primarily due to an increase in the valuation allowance relating to losses in certain U.S.

jurisdictions and an increase in pretax operating results.

As of December 31, 2020, total unrecognized tax benefits were $ 53 million and, if settled, $ 36 million would favorably impact the effective tax rate in future periods.

The Company recorded a tax provision in 2021 compared to a tax benefit in 2020.

The change was primarily driven by improvements in the Company's financial performance in 2021, changes in the mix of earnings and losses in jurisdictions for which no tax benefit can be recognized, non-deductible bankruptcy expenses, and reduced by the tax benefits of the European reorganization.

Hertz Holdings exclusive items are comprised of transactions specific to Hertz Holdings only.

The Company recorded a tax benefit in 2020 compared to a tax provision in 2019.

The change was due primarily to significant losses in 2020 resulting from the effect of COVID-19, offset, in part, by the impact of valuation allowances on net deferred tax assets.

As of December 31, 2021, total unrecognized tax benefits are $ 106 million and, if settled, $ 35 million would favorably impact the effective tax rate in future periods.

However, considering correlative adjustments associated

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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Balance as of December 31 $ 106 $ 53 $ 48

The Company conducts business globally and, as a result, files tax returns in the U.S.

jurisdictions.

In the normal course of business, the Company is subject to examination by taxing authorities throughout the world.

The open tax years for these jurisdictions span from 2005 to 2020.

The Company is subject to examination by taxing authorities throughout the world.

The tax years that are open for examination span from 2008 to 2021.

During 2020, the IRS proposed transfer pricing adjustments to the Company's 2014 and 2015 tax years, for which the company is pursuing competent authority relief.

The IRS continues to audit the Company's 2016 tax year.

Previously, in 2016, the German Tax Authorities provided us with an assessment which asserted that we underreported our German taxable income for our 2005–2010 tax years.

This assertion was based on the German Tax Authorities’ belief that certain intercompany charges made by the U.S.

to our German entity were overstated.

To avoid the double taxation resulting in these tax years from this assessment, the Company pursued U.S.

and German competent authority relief.

We believe that it is reasonably possible that a decrease of up to $ 25 million in unrecognized tax benefits related to the German assessment may be necessary within the coming year.

Additionally, we are under audit in several U.S.

states and other non-U.S.

jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances.

In the second quarter of 2021, the IRS concluded its audit of the Company's 2016 tax year which resulted in no audit adjustments.

During June 2021, the Company received final resolution to its request for competent authority relief concerning a German and U.S.

transfer pricing matter covering the 2005 - 2010 tax years.

The Company has reassessed its uncertain tax positions upon receipt of the new information for tax years 2011 - 2021, which did not result in a material adjustment as it reduced an NOL with a full valuation allowance.

The Company's assumptions and estimates pertaining to uncertain tax positions require significant judgment.

It is possible that the tax authorities could challenge the Company's estimates and assumptions used to assess the tax benefits, and the actual amount of the tax benefits related to uncertain tax positions may differ materially from these estimates.

Additionally, the Company is under audit in several U.S.

states and other foreign jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances.

The amount that is reasonably possible to change during the next twelve months is not expected to be significant.

Net, after-tax interest and penalties related to tax liabilities are classified as a component of income tax in the accompanying consolidated statements of operations.

Income tax expense of $ 1 million and $ 0.4 million was recognized for such interest and penalties during the years ended December 31, 2020 and 2019, respectively, and during the year ended December 31, 2018, a benefit of $ 1 million was recognized for such interest and penalties.

Net, after-tax interest and penalties related to tax liabilities are classified as a component of income tax in the accompanying consolidated statements of operations which were not significant for the years ended December 31, 2021, 2020 and 2019.

Net, after-tax interest and penalties were accrued as a component of tax in the Company's consolidated balance sheet in the amount of $ 7 million and $ 9 million as of December 31, 2021 and 2020, respectively.

Hertz Global no longer asserts permanent reinvestment of foreign earnings, due to the impact from COVID-19 as disclosed in Note 1, "Background." This change in assertion did not result in any significant impact to the income tax provision for the period ended December 31, 2020.

Beginning the first quarter of 2020, Hertz Global no longer asserts permanent reinvestment of foreign earnings with respect to its non-U.S.

earnings, due to the impact from COVID-19 as disclosed in Note 1, "Background."

Note 12— Fair Value Measurements

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Fair Value Disclosures

The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

The Company's assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 inputs (earnings before interest, taxes, depreciation and amortization ("EBITDA") multiples and royalty rates) and Level 3 inputs (forecasted cash flows and discount rates).

See Note 2, "Significant Accounting Policies — Recoverability of Goodwill and Intangible Assets," for more information on the application of the use of fair value methodology in the Company's assessment.

Cash Equivalents, Restricted Cash Equivalents and Investments

The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts.

The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets (i.e., Level 1 inputs).

Investments in equity securities that are measured at fair value on a recurring basis consisted of marketable securities which the Company divested of in 2020.

See Note 3, "Divestitures," for further information.

The following table summarizes the ending balances of the Company's cash equivalents, restricted cash equivalents and investments:

December 31, 2020 December 31, 2019

(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash equivalents $ 723 $ — $ — $ 723 $ 531 $ — $ — $ 531

Marketable securities — — — — 74 — — 74

Debt Obligations

The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e., Level 2 inputs).

As of December 31, 2020 As of December 31, 2019

(In millions) Nominal Unpaid Principal Balance Aggregate Fair Value (1)

Nominal Unpaid Principal Balance Aggregate Fair Value

The fair value of the debt facilities is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e.

Level 2 inputs).

December 31, 2021 December 31, 2020

(In millions) Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value

Non-Vehicle Debt (1)

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Total $ 11,009 $ 10,973 $ 10,834 $ 9,403

(1) The decrease in the aggregate fair value of the Company's debt is due to the impact from COVID-19 and the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background."

(1) Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

See Note 6, "Debt."

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Donlen Asset Sale

As a result of the impending sale of the Donlen Assets, the associated assets and liabilities have been classified as assets held for sale and liabilities held for sale, respectively as of December 31, 2020.

Additionally, the assets and liabilities classified as held for sale were required to be recorded at the lower of carrying value or fair value less any costs to sell.

See Note 3, "Divestitures," for additional information.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company's cash equivalents, restricted cash equivalents and Public Warrants that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as follows:

December 31, 2021 December 31, 2020

(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash equivalents and restricted cash equivalents $ 1,678 $ — $ — $ 1,678 $ 723 $ — $ — $ 723

Public warrants $ 1,324 $ — $ — $ 1,324 $ — $ — $ — $ —

Cash Equivalents and Restricted Cash Equivalents

The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts.

The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e.

Level 1 inputs).

Public Warrants

Under the Plan of Reorganization, reorganized Hertz Global issued Public Warrants, which are classified as liabilities at fair value in the accompanying consolidated balance sheet as of December 31, 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ("Topic 480").

See Note 18, "Public Warrants - Hertz Global," for further details.

Upon issuance on the Effective Date, the initial fair value of the Public Warrants was $ 800 million.

The Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy.

For the year ended December 31, 2021, the fair value adjustment was a loss of $ 627 million and is recorded in change in fair value of Public Warrants in the accompanying consolidated statement of operations for Hertz Global for the year ended December 31, 2021.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Donlen Assets

As of December 31, 2020 as a result of the then-impending Donlen Sale, the associated assets and liabilities were classified as assets held for sale and liabilities held for sale, respectively, in the accompanying consolidated balance sheet as of December 31, 2020 and were recorded at the lower of carrying value or fair value less any costs to sell.

The Company completed the Donlen Sale on March 30, 2021.

See Note 3, "Divestitures," for additional information.

Note 13— Accumulated Other Comprehensive Income (Loss)

Changes in the accumulated other comprehensive income (loss) balance by component (net of tax) are as follows:

Changes in the accumulated other comprehensive income (loss) balance by component (net of tax) is as follows:

(In millions) Pension and Other Post-Employment Benefits Foreign Currency Items Unrealized Losses from Currency Translation Adjustments on Terminated Net Investment Hedges Accumulated Other Comprehensive Income (Loss)

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Legal Proceedings

Public Liability and Property Damage

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for public liability and property damage arising from the operation of motor vehicles rented from the Company.

The obligation for public liability and property damage on self-insured U.S.

Self-Insured Liabilities

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company.

The obligation for self-insured liabilities on self-insured U.S.

and international vehicles, as stated in the accompanying consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported.

The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs.

As of December 31, 2020 and 2019, the Company's liability recorded for public liability and property damage matters is $ 488 million and $ 553 million, respectively.

The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions.

The liability is subject to significant uncertainties.

The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes.

If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business, including claims by employees and former employees and governmental

As of December 31, 2021 and 2020, the Company's liability recorded for self-insured liabilities was $ 463 million and $ 488 million, respectively.

The Company believes that its analysis is based on the most relevant information available, combined with reasonable

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

investigations.

The Company has summarized below the most significant legal proceedings to which the Company was and/or is a party during 2020 or the period after December 31, 2020, but before the filing of this 2020 Annual Report.

Governmental Investigations - The Company previously identified certain activities in Brazil that raised issues under the Foreign Corrupt Practices Act (the "FCPA") and other federal and local laws, which the Company self-reported to appropriate government entities.

The matters associated with the FCPA and other federal matters were previously resolved without further action by the applicable U.S.

government entities.

The Company entered into a leniency agreement in August 2020 with the Brazilian authorities for a monetary sanction against a Hertz non-Debtor subsidiary and the matters under local Brazilian laws are now closed.

The liability is subject to significant uncertainties.

The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes.

If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

The Company has summarized below the material legal proceedings to which the Company was a party during the year ended December 31, 2021 or the period after December 31, 2021, but before the filing of this 2021 Annual Report.

In re Hertz Global Holdings, Inc.

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As a result of the Company's bankruptcy, the appeal was stayed as to the Company, but the plaintiffs advocated that the appeal could proceed against the individual defendants.

On October 13, 2020, the Third Circuit affirmed the District Court’s dismissal of the plaintiffs’ motion for relief against the individual defendants since the motion was not timely filed.

In addition to the matters described above, the Company maintains an internal compliance program through which it from time to time identifies other potential violations of laws and regulations applicable to the Company.

When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate.

The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated.

Other than the aggregate reserve established for claims for public liability and property damage, none of those reserves are material.

For matters, including certain of those described above, where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated.

These matters are subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance.

It is possible that certain of the actions, claims, inquiries or proceedings, including those disclosed above, could be decided unfavorably to the Company or any of its subsidiaries involved.

Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the accompanying consolidated financial condition, results of operations or cash flows in any particular reporting period.

Other Proceedings

Litigation Against Former Executives - The Company filed litigation in federal court in New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against Scott Sider on March 28, 2019, all of whom were former executive officers of Old Hertz Holdings.

The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the

On October 13, 2020, the Third Circuit affirmed the District Court’s dismissal of the plaintiffs’ motion for relief against the individual defendants since the motion was not timely filed and the appeal as to the Company remained stayed.

In February 2021, the parties participated in a bankruptcy-related mediation process and arrived at a tentative settlement wherein the Company would pay a $ 250,000 cash settlement.

In return, the plaintiffs would voluntarily dismiss all claims in the underlying action with prejudice and withdraw the plaintiffs’ Proofs of Claim with prejudice.

On March 12, 2021, the Bankruptcy Court approved the tentative settlement and the terms of the settlement have now been fully implemented.

This matter is now closed.

Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250 % Unsecured Notes due 2022, (2) 5.500 % Unsecured Notes due 2024, (3) 7.125 % Unsecured Notes due 2026, and (4) 6.000 % Unsecured Notes due 2028 issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation, Dollar Rent A Car, Inc., Dollar Thrifty Automotive Group, Inc., Donlen Corporation, DTG Operations, Inc., DTG Supply, LLC, Firefly Rent A Car LLC, Hertz Car Sales LLC, Hertz Global Services Corporation, Hertz Local Edition Corp., Hertz Local Edition Transporting, Inc., Hertz System, Inc., Hertz Technologies, Inc., Hertz Transporting, Inc., Rental Car Group Company, LLC, Smartz Vehicle Rental Corporation, Thrifty Car Sales, Inc., Thrifty, LLC, Thrifty Insurance Agency, Inc., Thrifty Rent A Car System, LLC, and TRAC Asia Pacific, Inc.

(collectively referred to in this summary as “Defendants”).

The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v.

The Hertz Corporation, et al.

pending in the United States Bankruptcy Court for the District of Delaware, Adv.

21-50995 (MFW).

The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

defendants in connection with restatements included in the Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and related accounting for prior periods.

payment of certain redemption premiums and post-petition interest that they assert total $ 271,684,720 plus interest at the contractual default rate or in the alternative are entitled to payment post-petition interest at the applicable contractual rate that they assert totals $ 124,512,653 plus interest at the New York statutory rate.

On July 2, 2021, Defendants were summoned to file a motion or answer to the Complaint within 30 days.

On August 2, 2021, the Defendants filed a motion to dismiss both counts for declaratory judgment, which was argued before Judge Walrath on November 9, 2021.

On December 23, 2021, the Bankruptcy Court dismissed Wells Fargo’s claims with respect to (i) the redemption premium allegedly owed on the 2022 and 2024 Notes and (ii) post-petition interest at the contract rate.

As a result, only Wells Fargo’s claims for a redemption premium with respect to the 2026 and 2028 Senior Notes now remain.

Additionally, note holders that elected to participate in the 2021 Rights Offering waived their right to collect on the make whole premium.

Therefore, since some of the 2026 and 2028 note holders elected to participate in the 2021 Rights Offering, the total amount which may be owed with respect to the asserted make whole premium for those series of notes will be reduced further.

The Defendants dispute that any such amounts are owed and intend to respond and otherwise vigorously defend claims set forth therein.

The Company cannot predict the outcome or timing of this litigation.

Additionally, some creditors in the Chapter 11 Cases may assert that the Company owes additional interest and, in certain cases, additional make whole or other premiums.

These claims could be material.

The Company retains all rights with respect to any such asserted amounts and intends to vigorously defend against any such asserted claims.

There can be no assurance regarding the outcome of any of the litigation regarding the validity or, if deemed valid, the amount of any such additional asserted interest and make whole claims and as such, the Company cannot predict the outcome or timing of this litigation.

The Company maintains an internal compliance program through which it from time to time identifies potential violations of laws and regulations applicable to the Company.

When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate.

The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated.

Other than the aggregate reserve established for claims for self-insured liabilities, none of those reserves are material.

For matters where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated.

These matters are subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance.

It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved.

Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.

Other Proceedings

Litigation Against Former Executives - The Company filed litigation in the U.S.

District Court for the District of New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against Scott Sider on March 28, 2019, all of whom were former executive officers of Old Hertz Holdings.

The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the defendants in connection with restatements included in the Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and related accounting for prior periods.

The Company is also seeking recovery for the costs of the SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and other damages resulting from the necessity of the restatements.

The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights.

The parties are currently involved in motion practice in the New Jersey action and discovery and depositions have commenced in the Florida action.

In October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas.

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The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020.

The mediation was unsuccessful, but settlement discussions have continued.

The mediation was unsuccessful, but settlement discussions continued

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider.

The Florida action is now closed.

On December 29, 2021, the Company entered into a settlement agreement with Jeff Zimmerman, leaving Mark Frissora as the sole remaining defendant in this litigation.

Fact discovery has now been completed in the New Jersey action and the case will proceed to the pre-trial phase of experts’ reports and experts’ depositions.

Pursuant to the agreements governing the separation of Herc Holdings from Hertz Global that occurred on June 30, 2016, Herc Holdings is entitled to 15 % of the net proceeds of any repayment or recovery.

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Transactions and Agreements between Hertz Holdings and Hertz

In June 2018, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $ 425 million with an expiration in June 2019 at an interest rate based on the U.S.

Dollar LIBOR rate plus a margin (the "2018 Master Loan").

In June 2019, upon expiration of the 2018 Master Loan, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $ 425 million with an expiration in June 2020 (the "2019 Master Loan") where amounts outstanding under the 2018 Master Loan were transferred to the 2019 Master Loan.

In June 2019, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $ 425 million with an expiration in June 2020 (the "2019 Master Loan").

The interest rate was based on the U.S.

Dollar LIBOR rate plus a margin.

As of December 31, 2019, the amount outstanding under the 2019 Master loan was $ 129 million, representing advances and any accrued but unpaid interest.

Additionally, Hertz had a loan due to an affiliate in the amount of $ 65 million as of December 31, 2019, representing a tax-related liability to Hertz Holdings.

The net impact of the above amounts is included in stockholder's equity in the accompanying consolidated balance sheet of Hertz as of December 31, 2019.

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the full amount outstanding under the 2019 Master Loan was deemed uncollectible, resulting in a charge of $ 133 million during the second quarter of 2020, which is included in the accompanying consolidated statement of operations for Hertz for the year ended December 31, 2020.

Additionally, the loan due to an affiliate, which represents a tax-related liability from Hertz to Hertz Holdings, in the amount of $ 65 million was classified as liabilities subject to compromise in the accompanying consolidated balance sheet of Hertz as of December 31, 2020.

On the Effective Date, the $ 65 million tax-related liability from Hertz to Hertz Holdings was reinstated.

See Note 20, "Liabilities Subject to Compromise." As of December 31, 2021, the $ 65 million tax-related liability has been settled via a non-cash distribution from Hertz to Hertz Holdings.

On May 23, 2020, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $ 25 million with an expiration in May 2021 (the "New Loan").

The interest rate was based on the U.S.

Dollar LIBOR rate plus a margin.

As of December 31, 2020, there was $ 1 million outstanding under the New Loan representing advances and any accrued but unpaid interest.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2020, which is included in the accompanying consolidated statement of operations for Hertz for the year ended December 31, 2020.

See Note 19, "Liabilities Subject to Compromise."

On May 23, 2020, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $ 25 million with an expiration in May 2021 (the "New Loan").

In May 2021, upon expiration of the New Loan, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $ 25 million with an expiration in May 2022 (the "2021 Master Loan"), where amounts outstanding under the New Loan were transferred to the 2021 Master Loan.

The interest rate is based on the U.S.

Dollar LIBOR rate plus a margin.

As of December 31, 2020, there is $ 1 million outstanding under the New Loan representing additional charges incurred during 2020 largely associated with the ATM Program, as disclosed in Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global," paid by Hertz on behalf of Hertz Holdings.

Agreements with the Icahn Group

In May 2020, Carl C.

Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P.

Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn Capital LP, Icahn Onshore LP, Icahn Offshore LP, Beckton Corp., Vincent J.

Intrieri, Samuel J.

Merksamer and Daniel A.

Ninivaggi (collectively, the “Icahn Group”) divested all owned shares of Hertz Global common stock (the "Icahn Divestiture").

As a result of the Icahn Divestiture, the Icahn Group is no longer a related party of the Company.

Subsequent to the Icahn Divestiture, there continue to be arms-length transactions between the Company and the Icahn Group.

In the normal course of business, the Company purchases goods and services and leases property from entities controlled by Carl C.

Icahn and his affiliates, including The Pep Boys - Manny, Moe & Jack.

During the five months ended May 31, 2020, the Company purchased approximately $ 23 million worth of goods and services from these related parties.

During the years ended December 31, 2019 and 2018, the Company purchased approximately $ 57 million and $ 39 million, respectively, worth of goods and services from these related parties.

In May 2018, the Company sold approximately $ 36 million of marketable securities to the Icahn Group at the then current market price of such securities.

On the Effective Date, in connection with the Chapter 11 Emergence, the ATM Program contribution from Hertz Global, as disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global," was used to settle amounts outstanding under the New Loan.

As of December 31, 2021, there was no outstanding balance under the 2021 Master Loan.

Other Relationships

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The Company believes that all such rental and procurement transactions involved terms no less favorable to the Company than those that it believes would have been obtained in the absence of such affiliation.

The Company's Nominating and Governance Committee oversees compliance through our Standards of Business Conduct, reviews conflicts of interest involving directors and determines whether to approve each transaction that involves the Company or any of its affiliates, on one hand, and (directly or indirectly) a director or member of his or her family or any entity managed by any such person, on the other hand.

The Company's Audit Committee oversees compliance through our Standards of Business Conduct, reviews conflicts of interest involving directors and determines whether to approve each transaction that involves the Company or any of its affiliates, on one hand, and (directly or indirectly) a director or member of his or her family or any entity managed by any such person, on the other hand.

767 Auto Leasing LLC

In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated with the Icahn Group, the option to acquire certain vehicles from Hertz at rates aligned with the rates at which Hertz sells vehicles to third parties.

As disclosed above, due to the Icahn Divestiture, the Icahn Group is no longer a related party of the Company.

Hertz leases the vehicles purchased by 767 under the 767 Lease Agreement or from third parties, under a mutually developed fleet plan and Hertz manages, services, repairs, sells and maintains those leased vehicles on behalf of 767.

Hertz currently rents the leased vehicles to drivers of TNCs from rental counters within locations leased or owned by affiliates of 767 ("Icahn Locations"), including locations operated under a master lease agreement with The Pep Boys - Manny, Joe & Jack.

The 767 Lease Agreement had an initial term, as extended, of

In January 2018, Hertz entered into the 767 Lease Agreement pursuant to which Hertz granted 767, an entity affiliated with a related party until May 2020, the option to acquire certain vehicles from Hertz.

The 767 Lease Agreement was terminated effective October 31, 2021 as disclosed in Note 3, "Divestitures."

Note 16— Equity and Mezzanine Equity – Hertz Global

Emergence from Bankruptcy

In connection with the Chapter 11 Emergence, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled.

As of the Effective Date, there are 1,000,000,000 shares of reorganized Hertz Global common stock and 100,000,000 shares of reorganized Hertz Global preferred stock authorized for issuance.

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock as follows:

• 277,119,438 shares purchased by the Plan Sponsors;

• 14,133,024 shares issued, pro rata, to existing stockholders;

• 127,362,114 shares issued pursuant to the 2021 Rights Offering;

• 52,487,886 shares distributed to the Backstop Parties.

As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding.

The parties, including the Plan Sponsors who purchased reorganized Hertz Global common stock and preferred stock (collectively, the "Equity Commitment Parties"), the subscribers to the 2021 Rights Offering, and the Backstop Parties purchased an aggregate of (i) $ 4.7 billion of reorganized Hertz Global common stock and (ii) $ 1.5 billion (less a 2 % upfront discount and stock issuance fees) of reorganized Hertz Global preferred stock as described below.

The excess par value for the common stock shares issued by reorganized Hertz Global was recorded to additional paid-in capital in the accompanying consolidated balance sheet of Hertz Global.

As of December 31, 2021, all 1,500,000 shares of preferred shares have been repurchased and retired by reorganized Hertz Global as described in the Tender Offer below.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

approximately 22 months, and is subject to automatic six month renewals thereafter, unless terminated by either party (with or without cause) prior to the start of any such six month renewal.

767’s payment obligations under the 767 Lease Agreement are guaranteed by American Entertainment Properties Corp.

("AEPC"), an entity affiliated with the Icahn Group.

During 2020, 767 distributed $ 75 million to AEPC and there were no cash contributions from AEPC to 767, except for certain services.

During 2019, AEPC contributed $ 49 million to 767 along with certain services.

The Company is entitled to 25 % of the profit from the rental of the leased vehicles, as specified in the 767 Lease Agreement, which is variable and based primarily on the rental revenue, less certain vehicle-related costs, such as depreciation, licensing and maintenance expenses.

The Company has determined that it is the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impact 767's economic performance and the Company's obligation to absorb 25 % of 767's gains/losses.

Accordingly, 767 is consolidated by the Company as a VIE.

In October 2019, the 767 Lease Agreement was amended such that, among other changes, 767 vehicles will be available for rent from Hertz locations that are opened in replacement of closed Icahn Locations and the 767 vehicles may be available for rent to traditional off airport customers in addition to TNC drivers, when certain conditions apply.

Note 17— Equity and Earnings (Loss) Per Share - Hertz Global

Equity of Hertz Global Holdings, Inc.

As of December 31, 2020 and 2019, there were 40 million shares of Hertz Holdings preferred stock authorized, par value $ 0.01 per share, 400 million shares of Hertz Holdings common stock authorized, par value $ 0.01 per share, and two million shares of treasury stock.

Share Repurchase Program

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, Hertz Holdings has repurchased two million shares for $ 100 million under this program.

This amount is included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2020 and 2019, respectively.

The timing and extent to which Hertz Holdings repurchases its shares will depend upon, among other things, market conditions, share price, liquidity targets and other factors.

Share repurchases may be commenced or suspended at any time or from time to time without prior notice.

Since Hertz Holdings does not conduct business itself, it primarily funds 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 its ability to make dividends and certain payments, including payments to Hertz Holdings for share repurchases.

Earnings (Loss) Per Share

Basic earnings (loss) per share has been computed based upon the weighted-average number of common shares outstanding.

Diluted earnings (loss) per share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive.

Under reorganized Hertz Global's revised articles of incorporation, 1,000,000,000 shares of reorganized Hertz Global common stock, par value $ 0.01 per share, have been authorized for issuance.

Each share represents one vote on matters presented to the voting stockholders of reorganized Hertz Global.

The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying consolidated balance sheet of Hertz Global as of December 31, 2021.

The reorganized Hertz Global common stock is not convertible and does not accrue dividends.

Dividends, if any, are paid only upon a valid declaration by the Board of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to the Series A Preferred Stock, and applicable debt covenants.

2021 Rights Offering

In accordance with the Plan of Reorganization, approximately 35 % of reorganized Hertz Global common stock was offered pursuant to the 2021 Rights Offering for an aggregate purchase price of $ 1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $ 10.00 per share.

The 2021 Rights Offering subscription was first made available to eligible existing Hertz Global stockholders ("Eligible Existing Stockholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed and funded by Eligible Existing Stockholders, to certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility, pursuant to certain subscription procedures.

The final expiration date for the 2021 Rights Offering occurred on June 15, 2021.

Hertz Global closed the offering upon emergence from the Chapter 11 Cases on the Effective Date with Eligible Existing Stockholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $ 1.3 billion.

The unsubscribed portion of the 2021 Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $ 361 million.

The Backstop Parties were compensated a backstop fee of $ 164 million in reorganized Hertz Global common stock valued at $ 10.00 per share which is included in the 2021 Rights Offering in the accompanying Consolidated Statements of Changes in Mezzanine Equity and Stockholders' Equity.

During the third quarter of 2021, reorganized Hertz Global issued additional shares pursuant to the rounding provisions of the 2021 Rights Offering for cash proceeds of approximately $ 4 million at a purchase price of $ 10.00 per share.

Public Warrants

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

See Note 18 , " Public Warrants - Hertz Global," for attributes of the Public Warrants, which are classified at fair value as a liability for financial reporting purposes under U.S.

Mezzanine Equity - Preferred Stock

In accordance with the revised articles of incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $ 0.01 per share, have been authorized for issuance.

Mezzanine Equity – Series A Preferred Stock

In connection with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock on the Effective Date, with an initial stated value of $ 1,000 per share, to Apollo, on behalf of one or more investment funds, separate accounts, and other entities owned, controlled, managed, and/or advised by Apollo or its affiliates, for $ 1.5 billion, less a 2 % upfront discount and stock issuance fees.

Shares of the Series A Preferred Stock accrued dividends payable in cash semi-annually in arrears, at a rate of 9 % per annum prior to June 30, 2023 and generally increasing thereafter.

The first cash dividend payment was payable on the six-month anniversary of the Effective Date.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and providing for the issuance of up to an aggregate of 57,915,055 new shares of Hertz Global common stock.

As no one person or entity controls the voting stock of reorganized Hertz Global, a potential change-in-control action could be outside the Company's control and result in a non-compliance event, which could then result in a mandatory redemption of all outstanding shares of Series A Preferred Stock.

Accordingly, the Series A Preferred Stock was classified as mezzanine equity upon issuance and recorded at its redemption amount.

Pursuant to the certificate of designations for the Series A Preferred Stock, Hertz Global could redeem the Series A Preferred Stock in whole or in part at any time and from time to time, in cash, at a redemption price equal to the then-current accrued stated value of the Series A Preferred Stock being redeemed, subject to a multiple of invested capital floor price equal to a specified multiple 1.30 times the $ 1,000 per share liquidation preference.

Tender Offer for Repurchase of Series A Preferred Stock

On November 23, 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 Tender Offer expired on December 21, 2021 and all shares of the Series A Preferred Stock were repurchased at a price of $ 1,250 per share for aggregate payments by Hertz Global of $ 1.9 billion.

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

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

Concurrent with the Tender Offer, Hertz Global solicited consents from a majority of the holders of the Series A Preferred Stock to amend the certificates of designation of the Series A Preferred Shares in order to eliminate the requirement that, without the affirmative vote or consent of holders of a majority of the Series A Preferred Shares outstanding, Hertz Global could not make certain restricted payments (as defined in the certificate of designations) and certain of Hertz Global's unrestricted subsidiaries could not make certain payments in respect of junior stock (as defined in the certificate of designations).

Based on the final results of the Tender Offer, the requisite consent of at least a majority of the outstanding Series A Preferred Shares required to approve the proposed amendment was obtained, although it was not necessary to implement the amendment in light of the fact that all Series A Preferred Shares were tendered in the Tender Offer.

The difference between the carrying value of the Series A Preferred Stock at expiration of the Tender Offer and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees, of $ 450 million is recorded to Hertz Global's additional paid in capital as of December 31, 2021, and accordingly, is subtracted from net income available to common stockholders of Hertz Global for purposes of calculating basic and diluted earnings per share for the year ended December 31, 2021.

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.

Registration Status of Stock Issued on the Effective Date and Nasdaq Listing

With the exception of the shares of reorganized Hertz Global's common stock issued to the Backstop Parties, the direct investment commitment under the EPCA and the 2021 Rights Offering, the common stock and the Public Warrants issued by the reorganized Hertz Global pursuant to the Plan of Reorganization on the Effective Date were issued under an exemption from the registration requirements of the Securities Act under the Bankruptcy Code.

Shares of reorganized Hertz Global common stock issued to the Backstop Parties, the direct investment commitment under the EPCA, the 2021 Rights Offering and the Series A Preferred Stock were issued under Section 4(a)(2) of the Securities 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 registration of Hertz Global's common stock in the Nasdaq listing, certain selling stockholders offered and sold 44,520,000 shares of Hertz Global's common stock to the public.

Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

purchase price of $ 300 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021.

Share Repurchase Program for Common Stock

On November 29, 2021, Hertz Global's Board 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 Hertz Global's management through a variety of methods, such as open-market transactions (including pre-set trading plans pursuant to Rule 10b5-1 of the Exchange Act), privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

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

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 by Hertz Global at an average share price of $ 23.83 , resulting in an aggregate purchase price of $ 408 million.

This amount was included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021.

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.

Stockholders' Equity Prior to Plan of Reorganization

Equity of Hertz Global Holdings, Inc.

As of December 31, 2020, there were 40 million shares of Hertz Holdings preferred stock authorized, par value $ 0.01 per share, 400 million shares of Hertz Holdings common stock authorized, par value $ 0.01 per share, and 2 million shares of treasury stock.

In accordance with the Plan of Reorganization, all pre-reorganization equity interests were cancelled as of the Effective Date.

2019 Rights Offering

In June 2019, Hertz Global filed a prospectus supplement to its Registration Statement on Form S-3 declared effective by the SEC on June 12, 2019 for a rights offering to raise gross proceeds of approximately $ 750 million and providing for the issuance of up to an aggregate of 57,915,055 new shares of Hertz Global common stock (the "2019 Rights Offering").

Upon closing in July 2019, the 2019 Rights Offering was fully subscribed resulting in Hertz Global selling 57,915,055 shares of its common stock for gross proceeds of $ 750 million.

Basic weighted-average shares outstanding and weighted-average shares used to calculate diluted earnings (loss) per share for 2018 have been adjusted retrospectively to give effect to the Rights Offering.

Open Market Sale Agreement

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to 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.

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into an open market sale agreement under which it could 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 ("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, which is included in non-vehicle restricted cash in the accompanying consolidated balance sheet as of December 31, 2020.

The following table sets forth the computation of basic and diluted earnings (loss) per share:

On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled.

Additionally, on the Effective Date, Hertz Global contributed the $ 28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying consolidated balance sheet of Hertz as of December 31, 2021.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17— Earnings (Loss) Per Common Share – Hertz Global

Basic earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding.

Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, except when the effect would be anti-dilutive.

For the year ended December 31, 2021, the diluted weighted-average shares outstanding included the dilutive impact of Public Warrants where the Company assumed share settlement of the Public Warrants as of the beginning of the reporting period.

Additionally, the Company removes the change in fair value of Public Warrants when computing diluted earnings (loss) per common share, when the impact of Public Warrants is dilutive.

As disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global," the Tender Offer to repurchase all outstanding shares of the Series A Preferred Stock expired in December 2021 with all shares of the Series A Preferred Stock repurchased by Hertz Global.

The difference between the carrying value of the Series A Preferred Stock at expiration of the Tender Offer and the redemption value paid by Hertz Global was deemed a dividend to the holders of Hertz Global's Series A Preferred Stock, along with certain fees for purposes of computing basic and diluted earnings per share below.

As dividends represent earnings that were not available to the holders of Hertz Global's common stock when computing basic and diluted earnings (loss) per common share, they are reflected as an adjustment to net income (loss) available to common stockholders when computing basic and diluted earnings (loss) per common share for Hertz Global.

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

Years Ended December 31,

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Net income (loss) attributable to Hertz Global $ 366 $ ( 1,714 ) $ ( 58 )

$ ( 1,714 ) $ ( 58 ) $ ( 225 )

Basic weighted-average shares outstanding (excluding the impact of the Rights Offering)

Series A Preferred Stock deemed dividends (1)

Net income (loss) available to Hertz Global common stockholders $ ( 84 ) $ ( 1,714 ) $ ( 58 )

Basic weighted-average common shares outstanding 315 150 84

2019 Rights Offering adjustment (2)

Basic weighted-average shares outstanding 150 117 96

Dilutive stock options, RSUs and PSUs — — —

Diluted weighted-average shares outstanding 150 117 96

Diluted weighted-average common shares outstanding 315 150 117

Antidilutive Public Warrants 14 — —

Antidilutive stock options, RSUs, PSUs and PSAs 1 2 2

Earnings (loss) per share:

Basic earnings (loss) per share $ ( 11.44 ) $ ( 0.49 ) $ ( 2.35 )

Diluted earnings (loss) per share $ ( 11.44 ) $ ( 0.49 ) $ ( 2.35 )

Total antidilutive 15 2 2

Earnings (loss) per common share:

Basic $ ( 0.27 ) $ ( 11.44 ) $ ( 0.49 )

Diluted $ ( 0.27 ) $ ( 11.44 ) $ ( 0.49 )

(1) Reflects the difference between the carrying value of the Series A Preferred Stock at expiration of the Tender Offer and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees.

(2) Reflects the impact of the 2019 Rights Offering subscription period and the weighted-average impact of the issuance of 57,915,055 shares from the 2019 Rights Offering on July 18, 2019.

Note 18— Segment Information

The Company’s chief operating decision maker assesses performance and allocates resources based upon the financial information for the Company’s operating segments.

The Company aggregates certain of its operating segments into its reportable segments.

The Company has identified three reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows:

RAC - rental of vehicles (cars, crossovers and light trucks), as well as sales of value-added services, in the U.S.

and consists of the Company's U.S.

operating segment;

• International RAC - rental and leasing of vehicles (cars, vans, crossovers and light trucks), as well as sales of value-added services, internationally and consists of the Company's Europe and Other International operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments;

Under the Plan of Reorganization approved by the Bankruptcy Court, the 2021 Rights Offering subscription was made available to Eligible Existing Stockholders on a pro rata basis to their existing common stock interests;

therefore earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date for the 2021 Rights Offering.

Note 18— Public Warrants - Hertz Global

On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $ 13.80 per Public

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• All Other Operations - primarily consists of the Company's Donlen business, which provides vehicle leasing and fleet management services, together with other business activities which represent less than 1% of revenues and expenses of the segment.

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

See Note 3, "Divestitures," for further information.

In addition to the above reportable segments, the Company has Corporate operations which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt).

Warrant, subject to certain conditions.

The Public Warrants allow the holders to purchase up to 18 % of the aggregate number of reorganized Hertz Global common interests issued and outstanding as of the Effective Date.

Each Public Warrant will entitle the holders to receive one share of reorganized Hertz Global common stock.

The Public Warrants have a 30-year term and are exercisable from the date of issuance until June 30, 2051, at which time any unexercised Public Warrants will expire, and the rights of the holders to purchase reorganized Hertz Global common stock will terminate.

The exercise price of the Public Warrants is subject to adjustment from time to time upon any payment of cash dividends relating to reorganized Hertz Global's common stock and the occurrence of certain dilutive events as described in the Public Warrant Agreement.

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

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.

The Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock.

On November 9, 2021, the Public Warrants began trading on Nasdaq under the symbol HTZWW.

The Public Warrants previously traded on the over-the-counter market.

The Company accounts for the Public Warrants in accordance with the provisions of Topic 480, under which the Public Warrants meet the definition of a freestanding financial instrument.

Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions that are only applicable in the event of change of control (as defined by the Public Warrant Agreement).

The Public Warrants are recorded at fair value in the accompanying consolidated balance sheet as of December 31, 2021.

See Note 12, "Fair Value Measurements."

Note 19— Segment Information

The Company’s CODM assesses performance and allocates resources based upon the financial information for the Company’s reportable segments.

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

The Company has identified two reportable segments, which are consistent with its operating segments and organized based on the products and services provided and the geographic areas in which business is conducted, as follows:

• Americas RAC - rental of vehicles (cars, crossovers, vans and light trucks), 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 (cars, vans, crossovers and light trucks), as well as sales of value-added services internationally and consists primarily of the Company's Europe and other international locations.

In addition, in the second quarter of 2021, as a result of the Donlen Sale, as disclosed in Note 3, "Divestitures," the All Other Operations reportable segment, which consisted primarily of the Company's former Donlen business, was no longer deemed a reportable segment.

In addition to its reportable segments and other operating activities, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt).

Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.

Effective during the three months ended June 30, 2019, the Company changed its segment measure of profitability for its reportable segments to Adjusted EBITDA, as shown in the Adjusted EBITDA reconciliation tables below.

This measure better aligns with the way the Company reviews its overall vehicle rental and leasing business and determines management incentive compensation.

Prior to the three months ended June 30, 2019, the Company's segment measure of profitability was Adjusted Pre-tax Income (Loss) which included non-vehicle depreciation and amortization, non-vehicle debt interest, net and certain other items.

For comparability purposes, the Company has adjusted retrospectively the 2018 segment results to reflect the new segment measure of profitability.

The following tables provide significant statements of operations, balance sheets and statements of cash flow information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables provide significant statement of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.

Years Ended December 31,

(In millions) 2021 2020 2019

$ 3,656 $ 6,938 $ 6,480

International Rental Car

972 2,169 2,276

Americas RAC $ 6,215 $ 3,756 $ 7,208

International RAC 985 872 1,899

Total reportable segments 7,200 4,628 9,107

All other operations (1)

Total Hertz Global and Hertz $ 7,336 $ 5,258 $ 9,779

$ 5,258 $ 9,779 $ 9,504

Depreciation of revenue earning vehicles and lease charges

$ 1,323 $ 1,656 $ 1,678

International Rental Car

Americas RAC $ 343 $ 1,352 $ 1,706

International RAC 154 243 388

Total reportable segments 497 1,595 2,094

All other operations (1)(2)

Total Hertz Global and Hertz $ 497 $ 2,030 $ 2,563

$ 2,032 $ 2,565 $ 2,690

Depreciation and amortization, non-vehicle assets

$ 179 $ 156 $ 159

International Rental Car

Americas RAC $ 166 $ 182 $ 159

International RAC 16 19 20

Total reportable segments 182 201 179

All other operations (1)

Total Hertz Global and Hertz $ 196 $ 225 $ 203

$ 225 $ 203 $ 218

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years Ended December 31,

(In millions) 2020 2019 2018

Interest expense, net

$ 253 $ 157 $ 144

International Rental Car

Americas RAC $ 198 $ 259 $ 166

International RAC 62 80 84

Total reportable segments 260 339 250

All other operations (1)

4 unchanged sentences

Adjusted EBITDA

$ ( 791 ) $ 480 $ 226

International Rental Car

( 248 ) 147 231

Americas RAC $ 2,173 $ ( 810 ) $ 512

International RAC 90 ( 229 ) 115

Total reportable segments 2,263 ( 1,039 ) 627

All other operations (1)

1 unchanged sentence

Total Hertz Global and Hertz $ 2,130 $ ( 995 ) $ 649

$ ( 995 ) $ 649 $ 433

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31,

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Revenue earning vehicles, net

$ 4,974 $ 9,820

International Rental Car

Americas RAC $ 7,897 $ 5,120

International RAC 1,329 942

Total reportable segments 9,226 6,062

All other operations (1)(3)

Total Hertz Global and Hertz $ 9,226 $ 7,494

$ 7,494 $ 13,789

Property and equipment, net

International Rental Car

Americas RAC $ 449 $ 490

International RAC 67 78

Total reportable segments 516 568

All other operations (1)(4)

Total Hertz Global and Hertz $ 608 $ 672

$ 11,042 $ 16,459

International Rental Car

Americas RAC $ 14,352 $ 11,337

International RAC 2,978 2,661

Total reportable segments 17,330 13,998

All other operations (1)(5)

4 unchanged sentences

$ 19,780 $ 16,880

(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021.

(2) Depreciation for the Donlen business was suspended while classified as held for sale.

See Note 3, "Divestitures."

(3) Includes $ 1.4 billion of revenue earning vehicles, net classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."

1 unchanged sentence

(5) Includes $ 1.8 billion of assets classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."

(4) The consolidated total assets of Hertz Global and Hertz as of December 31, 2020 and 2019 include total assets of VIEs of $ 511 million and $ 1.3 billion, respectively, which can only be used to settle obligations of the VIEs.

See "Special Purpose Entities" in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 16, "Related Party Transactions," for further information.

(5) Excludes net proceeds from the ATM Program of $ 28 million as disclosed in Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global."

(6) The consolidated total assets of Hertz Global and Hertz as of December 31, 2021 and 2020 included total assets of VIEs of $ 734 million and $ 511 million, respectively, which can only be used to settle obligations of the VIEs.

See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.

(7) Excludes net proceeds from the ATM Program of $ 28 million as of December 31, 2020 as disclosed in Note 16, "Equity and Mezzanine Equity – Hertz Global."

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2 unchanged sentences

Revenue earning vehicles and non-vehicle capital assets

Americas RAC:

$ ( 5,935 ) $ ( 4,059 ) $ ( 9,790 )

3 unchanged sentences

$ ( 3,798 ) $ 3,906 $ ( 3,147 )

International Rental Car:

International RAC:

$ ( 1,123 ) $ ( 930 ) $ ( 2,995 )

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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(2) Includes $ 48 million of assets classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."

Reconciliations of Adjusted EBITDA by segment to consolidated amounts are summarized below:

Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:

Years Ended December 31,

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Adjusted EBITDA:

$ ( 791 ) $ 480 $ 226

International Rental Car

( 248 ) 147 231

All Other Operations

Americas RAC $ 2,173 $ ( 810 ) $ 512

International RAC 90 ( 229 ) 115

Total reportable segments 2,263 ( 1,039 ) 627

All other operations (1)

Corporate (2)

3 unchanged sentences

Non-vehicle debt interest, net (3)

Vehicle debt-related charges (2)

( 185 ) ( 153 ) ( 311 )

Loss on extinguishment of vehicle debt (3)

Vehicle debt-related charges (4)

( 72 ) ( 55 ) ( 38 )

1 unchanged sentence

( 76 ) ( 64 ) ( 14 )

Intangible and other asset impairments (5)

Technology-related intangible and other asset impairments (6)

Information technology and finance transformation costs (7)

1 unchanged sentence

Reorganization items, net (8)

( 677 ) ( 175 ) —

Pre-reorganization charges and non-debtor financing charges (9)

( 42 ) ( 109 ) —

Gain from the Donlen Sale (10)

Change in fair value of Public Warrants (11)

Other items (12)

3 unchanged sentences

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2 unchanged sentences

Adjusted EBITDA:

$ ( 791 ) $ 480 $ 226

International Rental Car

( 248 ) 147 231

All Other Operations

Americas RAC $ 2,173 $ ( 810 ) $ 512

International RAC 90 ( 229 ) 115

Total reportable segments 2,263 ( 1,039 ) 627

All other operations (1)

Corporate (2)

3 unchanged sentences

Non-vehicle debt interest, net (3)

Vehicle debt-related charges (2)

( 185 ) ( 151 ) ( 304 )

Loss on extinguishment of vehicle debt (3)

Vehicle debt-related charges (4)

( 72 ) ( 55 ) ( 38 )

1 unchanged sentence

( 76 ) ( 64 ) ( 14 )

Intangible and other asset impairments (5)

Technology-related intangible and other asset impairments (6)

Write-off of intercompany loan (13)

2 unchanged sentences

Reorganization items, net (8)

( 513 ) ( 175 ) —

Pre-reorganization charges and non-debtor financing charges (9)

( 42 ) ( 109 ) —

Gain from the Donlen Sale (10)

Other items (12)

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

(1) Represents other reconciling items primarily consisting of general corporate expenses, non-vehicle interest expense, as well as other business activities.

(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2) Represents other reconciling items primarily consisting of general corporate expenses as well as other business activities.

(3) For 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," for further information.

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

(3) 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.

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

GAAP, excluding impairments and asset write-downs.

See Note 10, "Restructuring," for further information.

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.

(5) 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."

(6) For 2020, represents a $ 193 million impairment of technology-related intangible assets and capitalized cloud computing implementations costs and a $ 20 million impairment of the Hertz tradename, as disclosed in Note 5, "Goodwill and Intangible Assets, Net."

(7) Represents costs associated with the Company's information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company's systems and processes.

(7) In 2020, represents charges incurred associated with the filing of the Chapter 11 Cases, as disclosed in Note 20, "Reorganization Items, Net."

(8) In 2020, represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," which are comprised of preparation charges for the reorganization, such as professional fees.

(8) Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 21, "Reorganization Items, Net."

(9) Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," which were comprised of preparation charges for the reorganization, such as professional fees.

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

(10) Represents the net gain from the sale of the Company's Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures."

(11) Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.

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

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.

(10) In 2020, represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 16, "Related Party Transactions."

For 2021, 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 includes $ 16 million associated with the Donlen Asset Sale, partially offset by $ 18 million for losses associated with certain vehicle damages.

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

(13) For 2020, represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 15, "Related Party Transactions."

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 20— Liabilities Subject to Compromise

The accompanying consolidated balance sheet as of December 31, 2020 includes amounts classified as liabilities subject to compromise, which represent Pre-petition liabilities the Company anticipates will be allowed as claims in the Chapter 11 Cases.

These amounts represent the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts.

The Company will continue to evaluate these liabilities throughout the Chapter 11 process and adjust amounts as necessary.

Such adjustments could be material and will be recorded in reorganization items, net in the accompanying consolidated statements of operations.

The following table summarizes liabilities subject to compromise:

The accompanying consolidated balance sheet as of December 31, 2020 includes amounts classified as liabilities subject to compromise, which represented Pre-petition liabilities the Company anticipated would be allowed as claims in the Chapter 11 Cases.

These amounts represented the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases.

The following table summarizes liabilities subject to compromise as of December 31, 2020:

(In millions) December 31, 2020

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Liabilities subject to compromise - Hertz $ 5,030

(1) Included $ 24 million of U.S.

pension benefit obligation reported as liabilities subject to compromise as of December 31, 2020.

(2) See Note 6, "Debt," for details of Pre-petition, non-vehicle debt reported as liabilities subject to compromise as of December 31, 2020.

(3) See Note 15, "Related Party Transactions," for details of a Pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of December 31, 2020.

Note 20— Reorganization Items, Net

The Debtors have incurred and will continue to incur costs associated with the reorganization, including professional and consulting fees.

Charges associated with the Chapter 11 Cases have been recorded as reorganization items, net in the accompanying consolidated statements of operations for the year ended December 31, 2020.

For the year ended December 31, 2020, the Company incurred $ 175 million of charges comprised primarily of professional fees, of which $ 102 million were paid as of December 31, 2020, and $ 46 million and $ 19 million were recorded in accrued liabilities and accounts payable, respectively, in the accompanying consolidated balance sheet as of December 31, 2020.

Note 21— Condensed Combined Debtor-in-Possession Financial Information

The following financial statements represent the audited condensed combined financial statements of the Debtors.

The results of the non-debtor entities are not included in these financial statements.

Intercompany transactions among Debtors have been eliminated in the following financial statements.

Intercompany transactions among Debtors and non-debtor entities have not been eliminated in the following financial statements.

Amounts reported for Hertz Global and Hertz are substantially the same, with the exception of that related to interest expense (income) and tax provision (benefit), as well as activity associated with the master loan agreement between Hertz and Hertz Global and proceeds from the issuance of stock under the ATM Program as disclosed in the Notes to our consolidated financial statements under the caption Item 8, "Financial Statements and Supplementary Data” included in this 2020 Annual Report Note 16, "Related Party Transactions," and Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global," respectively.

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED COMBINED BALANCE SHEET

(in millions)

December 31, 2020

Cash and cash equivalents $ 492

Restricted cash and cash equivalents 305

Total cash, cash equivalents, restricted cash and restricted cash equivalents 797

Receivables, net 388

Due from non-debtor affiliates 51,638

Prepaid expenses and other assets 183

Revenue earning vehicles, net 37

Property and equipment, net 549

Operating lease right-of-use assets 1,424

Investment in subsidiaries, net 4,527

Intangible assets, net 2,988

Assets held for sale (1)

Total assets $ 63,192

LIABILITIES AND EQUITY

As a result of the Chapter 11 Emergence and implementation of the Plan of Reorganization, the Company reinstated certain liabilities that had been classified as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.

The following table represents the reinstatement of liabilities subject to compromise, which include Pre-petition liabilities that were allowed to be or that were estimated to be allowed as claims in the Chapter 11 Cases.

(In millions) Effective Date

Reinstated on the Effective Date:

Accounts payable $ 257

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Accrued taxes, net 14

Operating lease liabilities 1,385

Self-insured liabilities 251

Deferred income taxes, net 887

Total liabilities not subject to compromise 3,425

Liabilities subject to compromise 59,637

Liabilities held for sale (1)

Total liabilities 63,136

Total equity attributable to the Debtors 56

Total liabilities and equity $ 63,192

(1) The assets and liabilities of Donlen as of December 31, 2020, have been classified as assets held for sale and liabilities held for sale, respectively.

See Note 3, "Divestitures," for additional information.

Liabilities reinstated - Hertz Global 370

Stockholder's equity - Due to affiliate - Hertz (1)

Liabilities reinstated - Hertz $ 435

(1) See Note 15, "Related Party Transactions," for details of a Pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of December 31, 2020 that was settled via a non-cash distribution from Hertz to Hertz Holdings.

Note 21— Reorganization Items, Net

The Debtors incurred incremental costs as a result of the Chapter 11 Cases and settlement of liabilities under the Plan of Reorganization which were recorded as reorganization items, net in the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020.

HERTZ GLOBAL HOLDINGS, INC.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

The following tables summarize reorganization items, net:

Years Ended December 31,

(In millions) 2021 2020

Year Ended December 31, 2020

Total revenues $ 3,593

Direct vehicle and operating 2,896

Depreciation of revenue earning vehicles and lease charges 2,970

Selling, general and administrative 492

Interest (income) expense, net 122

Intangible and other asset impairments 213

Other (income) expense, net ( 35 )

Professional fees and other bankruptcy related costs $ 257 $ 175

Loss on extinguishment of debt (1)

Backstop fee 164 —

Breakup fee (2)

Contract settlements 25 —

Cancellation of share-based compensation grants (3)

Net gain on settlement of liabilities subject to compromise ( 22 ) —

Other, net ( 5 ) —

Reorganization items, net $ 677 $ 175

Total expenses 6,833

Income (loss) before income taxes and equity in earnings (losses) of non-debtor entities ( 3,240 )

Income tax (provision) benefit 710

Equity in earnings (losses) of non-debtor entities 816

Net income (loss) ( 1,714 )

Total other comprehensive income (loss), net of tax ( 23 )

Comprehensive income (loss) attributable to the Debtors $ ( 1,737 )

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED COMBINED STATEMENT OF CASH FLOWS

Years Ended December 31,

(In millions) 2021 2020

Year Ended December 31, 2020

Net cash provided by (used in) operating activities $ ( 738 )

Cash flows from investing activities:

Revenue earning vehicles expenditures ( 478 )

Proceeds from disposal of revenue earning vehicles 594

Non-vehicle capital asset expenditures ( 79 )

Proceeds from non-vehicle capital assets disposed of 48

Sales of marketable securities 74

Capital contributions to non-debtor entities ( 835 )

Return of capital from non-debtor entities 838

Loan to non-debtor entity ( 180 )

Loan repayment from non-debtor entity 189

Net cash provided by (used in) investing activities 171

Cash flows from financing activities:

Proceeds from issuance of vehicle debt 321

Repayments of vehicle debt ( 467 )

Proceeds from issuance of non-vehicle debt 1,812

Repayments of non-vehicle debt ( 855 )

Proceeds from the issuance of stock, net 28

Net cash provided by (used in) financing activities 837

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents 1

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 271

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 526

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 797

Professional fees and other bankruptcy related costs $ 257 $ 175

Loss on extinguishment of debt (1)

Breakup fee (2)

Contract settlements 25 —

Cancellation of share-based compensation grants (3)

Net gain on settlement of liabilities subject to compromise ( 22 ) —

Other, net ( 5 ) —

Reorganization items, net $ 513 $ 175

(1) Includes loss on extinguishment of debt resulting from the implementation of the Plan of Reorganization on the Effective Date.

Primarily composed of write-offs of unamortized deferred loan origination costs and early termination fees associated with terminated debt agreements.

See Note 6, "Debt," for further information.

(2) Breakup fee paid to prior plan sponsors Centerbridge Partners, L.P., Warburg Pincus LLC, Dundon Capital Partners, LLC and certain of their respective affiliates and certain holders of the Senior Notes upon Emergence in accordance with an Equity Purchase and Commitment and Agreement entered into on April 3, 2021 which was subsequently terminated.

(3) See Note 8, "Stock-Based Compensation," for further details.

Cash payments during the years ended December 31, 2021 and 2020 totaled $ 485 million and $ 102 million, respectively.

As of December 31, 2021, $ 25 million was recorded in accounts payable in the accompanying consolidated balance sheet as of December 31, 2021.

As of December 31, 2020, $ 46 million and $ 19 million were recorded in accrued liabilities and accounts payable, respectively, in the accompanying consolidated balance sheet as of December 31, 2020.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

HERTZ GLOBAL HOLDINGS, INC.

(DEBTOR-IN-POSSESSION)

PARENT COMPANY BALANCE SHEETS

(In millions, except par value)

Cash and cash equivalents $ 1 $ —

Restricted cash and restricted cash equivalents — 28

Total cash, cash equivalents, restricted cash and restricted cash equivalents 1 28

Non-vehicle receivables, net of allowance 1 —

Prepaid expenses and other assets 1 1

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Due from Hertz — 65

Total assets $ 4,355 $ 99

LIABILITIES AND STOCKHOLDERS' EQUITY

Accrued liabilities $ 54 $ —

Public Warrants 1,324 —

Due to Hertz — 1

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Total liabilities 1,378 43

Stockholders' equity:

Preferred stock, $ 0.01 par value, no shares issued and outstanding

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Equity before treasury stock 3,685 156

Treasury stock, at cost, 2,028,932 shares and 2,028,932 shares, respectively

Treasury stock, at cost, 27,450,854 and 2,028,932 common shares as of December 31, 2021 and 2020, respectively

( 708 ) ( 100 )

2 unchanged sentences

The accompanying notes are an integral part of these financial statements.

SCHEDULE I (Continued)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF OPERATIONS

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Write-off of intercompany loan — ( 133 ) —

Reorganization items net 164 — —

Change in fair value of Public Warrants 627 — —

Total expenses

791 ( 131 ) 7

Income (loss) before income taxes and equity in earnings (losses) of subsidiaries ( 791 ) 131 ( 7 )

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Net income (loss) 366 ( 1,714 ) ( 58 )

Series A Preferred Stock deemed dividends ( 450 ) — —

Net income (loss) available to Hertz Holdings common stockholders $ ( 84 ) $ ( 1,714 ) $ ( 58 )

The accompanying notes are an integral part of these financial statements.

2 unchanged sentences

HERTZ GLOBAL HOLDINGS, INC.

(DEBTOR-IN-POSSESSION)

PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

13 unchanged sentences

Proceeds from loans with Hertz — 5 12

Proceeds from Rights Offering, net — 748 —

Proceeds from Plan Sponsors 2,781 — —

Proceeds from rights offerings, net 1,639 — 748

Contributions to Hertz ( 5,642 ) — ( 750 )

Proceeds from exercises of Public Warrants 77 — —

Proceeds from issuance of preferred stock 1,433 — —

Distributions to common stockholders ( 239 ) — —

Purchases of treasury shares ( 654 ) — —

Repurchase of preferred stock ( 1,883 ) — —

Payments for Nasdaq listing costs ( 9 ) — —

Dividends from Hertz 2,470 — —

Proceeds from issuance of stock, net — 28 —

1 unchanged sentence

Net cash provided by (used in) financing activities ( 27 ) 31 7

Net increase (decrease) in cash and cash equivalents during the period

Cash and cash equivalents at beginning of period — — —

Cash and cash equivalents at end of period $ 28 $ — $ —

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period ( 27 ) 28 —

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 28 — —

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 1 $ 28 $ —

The accompanying notes are an integral part of these financial statements.

1 unchanged sentence

HERTZ GLOBAL HOLDINGS, INC.

(DEBTOR-IN-POSSESSION)

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

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Hertz Global Holdings, Inc.

("Hertz Global" when including its subsidiaries and variable interest entities ("VIEs") and "Hertz Holdings" excluding its subsidiaries and VIEs) was incorporated in Delaware in 2015 and wholly owns Rental Car Intermediate Holdings, LLC which wholly owns The Hertz Corporation ("Hertz"), Hertz Global's primary operating company.

was incorporated in Delaware in 2015 and wholly owns Rental Car Intermediate Holdings, LLC which wholly owns Hertz, Hertz Global's primary operating company.

On May 22, 2020, Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S.

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Bankruptcy Court for the District of Delaware.

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

On June 30, 2021, these entities emerged from bankruptcy.

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

20-11218 (MFW) .

Refer to Note 1, "Background," to its Notes to the consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data," for further information.

In November 2020, Hertz Global entered into a stock and asset purchase agreement to sell substantially all of the assets and certain liabilities of Donlen.

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

These condensed parent company financial statements reflect the activity of Hertz Holdings as the parent company to Hertz and have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Hertz exceed 25% of the consolidated net assets of Hertz Holdings.

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Note 3— Dividends

There were no non-cash dividends paid by Hertz in 2020, 2019, or 2018.

In 2021, $ 2.5 billion in cash dividends were paid by Hertz to Hertz Holdings to fund the Tender Offer and common stock share 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." Additionally, in December 2021, a $ 65 million tax-related liability for a loan due from Hertz to Hertz Holdings was settled via a non-cash distribution as further disclosed in Note 15, "Related Party Transactions," to the Notes to its consolidated financial statements in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." There were no non-cash dividends paid by Hertz in 2020 or 2019.

Note 4— Share Repurchase

For a discussion of the share repurchase program of Hertz Holdings, refer to Note 17, "Equity and Earnings (Loss) Per Share - Hertz Global" to the Notes to its consolidated financial statements in this 2020 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." As of December 31, 2020, Hertz Holdings repurchased two million shares for $ 100 million under this program.

This amount is included in treasury stock in the accompanying parent-only balance sheets of Hertz Holdings as of December 31, 2020 and 2019.

For a discussion of the share repurchase program of Hertz Holdings, refer to 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." In 2021, Hertz Holdings repurchased

SCHEDULE I (Continued)

HERTZ GLOBAL HOLDINGS, INC.

(DEBTOR-IN-POSSESSION)

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS (continued)

27,450,854 shares for $ 708 million.

This amount was included in treasury stock in the accompanying parent-only balance sheets of Hertz Holdings as of December 31, 2021.

Between January 1, 2022 and February 17, 2022, Hertz Holdings repurchased a total of 20,589,620 shares for $ 431 million.

Note 5— Transactions with Affiliates and Investments in Subsidiaries

For a discussion of Hertz Holdings transactions with Hertz under the master loan, refer to Note 16, "Related Party Transactions," to the Notes to its consolidated financial statements in this 2020 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." The amounts related to the master loan transactions are included in investments in subsidiaries in the accompanying parent-only balance sheet of Hertz Holdings for the year ended December 31, 2019.

For a discussion of Hertz Holdings transactions with Hertz under the master loan, refer to Note 15, "Related Party Transactions," to the Notes to its consolidated financial statements in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

For the year ended December 31, 2020, the negative balance in investments in subsidiaries, net in the accompanying parent-only balance sheet of Hertz Holdings reflects the $ 42 million stockholder's deficit attributable to Hertz.

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THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

(In millions)

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Year ended December 31, 2021 $ 46 $ 125 $ — $ ( 121 ) (1)

$ — $ ( 83 ) (1)(2)

Year ended December 31, 2020 35 94 (2)

— ( 83 ) (1)(2)

Year ended December 31, 2019 27 53 — ( 45 ) (1)

3 unchanged sentences

Year ended December 31, 2019 318 75 3 — 396

(1) Activity includes allowances associated with Donlen which have been classified as held for sale as of December 31, 2020, as disclosed in Note 3, "Divestitures," to the notes to the Company's consolidated financial statements in this 2020 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

(1) Amounts written off, net of recoveries.

(3) The release of the valuation allowance during 2018 was due to the sales or anticipated sales of properties which would generate capital gain.

(2) Activity includes allowances associated with Donlen which have been classified as held for sale as of December 31, 2020, as disclosed in Note 3, "Divestitures," to the notes to the Company's consolidated financial statements in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

HERTZ GLOBAL HOLDINGS, INC.

1 unchanged sentence

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

3 unchanged sentences

Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this 2021 Annual Report.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2020, due to the identification of a material weakness in our internal control over financial reporting, as further described below, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2021, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Internal control over financial reporting has inherent limitations.

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In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013).

Based on this assessment, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020 due to the identification of an information technology general controls (“ITGCs”) material weakness in our internal control over financial reporting as discussed below.

Material Weakness

We did not maintain effective ITGCs, specifically logical security controls over financially significant system applications.

The ineffective logical security controls included user provisioning and de-provisioning and user and privileged access reviews.

Due to the impact from COVID-19, the Company initiated a restructuring program in April 2020, affecting approximately 11,000 employees in the U.S.

Additionally, personnel levels in our international operations were reduced to align with reduced vehicle rental demands as a result of COVID-19.

As a result of the large number of employees leaving the Company in a condensed time period, we did not maintain an effective ITGC risk assessment, control activities or monitoring in the following areas:

Based on this assessment, management has concluded that we did maintain effective internal control over financial reporting as of December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which appears in this 2021 Annual Report.

Changes in Internal Control over Financial Reporting

Remediation of Previously Reported Material Weakness

As previously disclosed in Part II Item 9A Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, we identified a material weakness associated with information technology general controls (“ITGCs”), specifically logical security controls over financially significant system applications.

HERTZ GLOBAL HOLDINGS, INC.

1 unchanged sentence

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

CONTROLS AND PROCEDURES (Continued)

• Management did not have a sufficient complement of personnel with an appropriate level of knowledge, experience and training commensurate with our ITGC internal controls over financial reporting requirements as a result of the headcount reductions.

• Management did not maintain effective monitoring to ensure the operating effectiveness of our ITGCs, to escalate potential issues for resolution or to provide visibility to where resources were insufficient.

• Management did not effectively design or execute a plan to timely de-provision system application access for employees impact by these significant headcount reductions.

These control deficiencies did not result in a misstatement to the consolidated financial statements, however, the deficiencies when aggregated, could result in misstatements potentially impacting financial statement accounts and disclosures that would not be prevented or detected in a timely manner.

Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.

Our management has been implementing and continues to implement measures designed to ensure that the material weakness is remediated.

The remediation actions include, but are not limited to, the following:

• Performing an assessment of the IT organization to determine the sufficiency of resources with the appropriate level of knowledge, experience and training commensurate with our ITGC internal controls and executing any recommendations arising from the assessment.

• Clarifying and communicating roles for ITGC control owners and SOX project management team.

• Re-training ITGC control owners regarding risks, controls and maintaining adequate evidence.

During 2021, we implemented our previously disclosed remediation plan, which included completing the following remediation actions:

• Performed an assessment of the IT organization to determine the sufficiency of resources with the appropriate level of knowledge, experience and training commensurate with our ITGC internal controls and executed all recommendations arising from the assessment.

• Clarified and communicated roles for ITGC control owners and Sarbanes-Oxley (SOX) project management team through confirming the identification of each control owner, reinforcing requirements and creating a culture of accountability to enforce the compliance of ITGCs.

• Administered enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.

• Improved existing de-provisioning controls for timely execution of removal of terminated user access.

• Enhancing quarterly reporting on ITGC design and operational effectiveness to the Chief Information Officer and Audit Committee of the Board of Directors.

After identification of the material weakness, management performed further analysis and completed additional procedures to confirm that the material weakness did not result in any identified misstatements in the financial statements, and there were no changes to previously issued financial results.

Based on these procedures and analysis, and nothwithstanding the material weakness in our internal control over financial reporting, management has concluded that our consolidated financial statements and related notes included in this annual report have been prepared in accordance with GAAP.

Our Chief Executive Officer and Chief Financial Officer have certified that, based on each officer’s knowledge, the financial statements, as well as the other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Annual Report.

In addition, Ernst & Young LLP has issued an unqualified opinion on our consolidated financial statements, which is included in Item 8 of this Annual Report.

• Enhanced monitoring of ITGC design and operational effectiveness through implementation of monthly remediation progress status dashboards with the Chief Information Officer and Chief Financial Officer, which was then summarized quarterly to the Audit Committee of the Board of Directors.

During the fourth quarter ended December 31, 2021, we completed the necessary testing to conclude that the material weakness was remediated as of December 31, 2021.

Except for the material weakness remediation described above, there were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

HERTZ CORPORATION

1 unchanged sentence

HERTZ GLOBAL HOLDINGS, INC.

AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

CONTROLS AND PROCEDURES (Continued)

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Internal control over financial reporting has inherent limitations.

5 unchanged sentences

Material Weakness

We did not maintain effective ITGCs, specifically logical security controls over financially significant system applications.

The ineffective logical security controls included user provisioning and de-provisioning and user and privileged access reviews.

Due to the impact from COVID-19, the Company initiated a restructuring program in April 2020, affecting approximately 11,000 employees in the U.S.

Additionally, personnel levels in our international operations were reduced to align with reduced vehicle rental demands as a result of COVID-19.

• Management did not effectively design or execute a plan to timely de-provision system application access for employees impact by these significant headcount reductions.

Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.

Based on this assessment, management has concluded that we did maintain effective internal control over financial reporting as of December 31, 2021.

HERTZ GLOBAL HOLDINGS, INC.

1 unchanged sentence

THE HERTZ CORPORATION AND SUBSIDIARIES

(DEBTORS-IN-POSSESSION)

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 8. Financial Statements and Supplementary Data