13 unchanged sentences
Consolidated Statements of Comprehensive Income (Loss) for Years Ended December 31, 202 2 , 202 1 and 20 20
−Removed: Consolidated Statements of Changes in Stock holder's Equity (Deficit) for Years Ended December 31, 2021, 2020 and 2019
+Added: Consolidated Statements of Changes in Stockholder's Equity (Deficit) for Years Ended December 31, 202 2 , 202 1 and 20 20
Consolidated Statements of Cash Flows for Years Ended December 31, 202 2 , 202 1 and 20 20
7 unchanged sentences
Income Tax (Provision) Benefit
+Added: Financial Instruments
Fair Value Measurements
2 unchanged sentences
Related Party Transactions
−Removed: Equity and Mezzanine Equity – Hertz Global
−Removed: Earnings (Loss) Per Share – Hertz Global
+Added: Equity – Hertz Global
+Added: Earnings (Loss) Per Co mmon Share – Hertz Global
Public Warrants - Hertz Global
Segment Information
−Removed: Liabilities Subject to Compromise
Reorganization Items, Net
26 unchanged sentences
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.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment
−Removed: Description of the Matter For the year ended December 31, 2021, total depreciation of revenue earning vehicles and lease charges in the Americas RAC segment was $343 million, including gains and losses on disposals.
+Added: Description of the Matter For the year ended December 31, 2022, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $553 million, including gains and losses on disposals.
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.
1 unchanged sentence
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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: 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.
−Removed: 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.
+Added: The significant estimation uncertainty was primarily due to management’s assumptions related to market conditions and their effect on estimated residual values.
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.
2 unchanged sentences
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.
−Removed: We tested the base depreciation rate calculations performed within the IT application and evaluated the reasonableness of other significant assumptions such as resale market conditions, including consumer demand for specific vehicles, and disposition channels to assess the reasonableness of the residual value estimates made by management.
+Added: We evaluated the reasonableness of other significant assumptions, such as resale market conditions, to assess the reasonableness of the residual value estimates made by management.
Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.
−Removed: Valuation of Self-insured Liabilities
−Removed: 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.
+Added: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement
+Added: Description of the Matter As disclosed in Notes 2 and 15 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
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.
3 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities process.
−Removed: 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.
HERTZ GLOBAL HOLDINGS, INC.
AND SUBSIDIARIES
−Removed: 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).
−Removed: 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.
−Removed: Valuation of Indefinite-Lived Intangible Tradename Assets in the International Rental Car (“RAC”) Segment
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s indefinite-lived intangible tradename assets impairment review processes.
−Removed: 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 impairment test.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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, the terminal period revenue growth rates and the weighted average cost of capital.
+Added: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liability reserves is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the estimates, management’s application of complex judgments, and the use of actuarial methods.
+Added: In addition, the public liability, property damage, and liability insurance supplement self-insured liability reserve estimates are sensitive to management’s assumptions related to rental volume, actuarial evaluations of historical claim experience and trends, and future projections of ultimate losses used in the computation of these self-insured liabilities.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liability estimation process.
+Added: For example, we tested controls over management’s review of the assumptions outlined above that are used in these self-insured liability calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
+Added: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liability reserves, we performed audit procedures that included involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
+Added: We compared the Company's reserve to estimates of the liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.
/s/ Ernst & Young LLP
54 unchanged sentences
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.
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
Calculation of Non-Program Depreciation on Revenue Earning Vehicles in the Americas Rental Car (“RAC”) Segment
−Removed: Description of the Matter For the year ended December 31, 2021, total depreciation of revenue earning vehicles and lease charges in the Americas RAC segment was $343 million, including gains and losses on disposals.
+Added: Description of the Matter For the year ended December 31, 2022, total depreciation of revenue earning vehicles and lease charges, net in the Americas RAC segment was $553 million, including gains and losses on disposals.
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.
1 unchanged sentence
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.
−Removed: THE HERTZ CORPORATION 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.
−Removed: 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.
+Added: The significant estimation uncertainty was primarily due to management’s assumptions related to market conditions and their effect on estimated residual values.
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.
2 unchanged sentences
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.
−Removed: We tested the base depreciation rate calculations performed within the IT application and evaluated the reasonableness of other significant assumptions such as resale market conditions, including consumer demand for specific vehicles, and disposition channels to assess the reasonableness of the residual value estimates made by management.
+Added: We evaluated the reasonableness of other significant assumptions, such as resale market conditions, to assess the reasonableness of the residual value estimates made by management.
Additionally, we performed analytical procedures to evaluate historical gains and losses recognized upon disposal in order to retrospectively review the reasonableness of management’s estimates.
−Removed: Valuation of Self-insured Liabilities
−Removed: 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.
+Added: Valuation of Self-insured Liabilities – Public Liability, Property Damage, and Liability Insurance Supplement
+Added: Description of the Matter As disclosed in Notes 2 and 15 to the consolidated financial statements, the Company is self-insured for public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
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.
3 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s self-insured liabilities process.
−Removed: 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.
THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: 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).
−Removed: 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.
−Removed: Valuation of Indefinite-Lived Intangible Tradename Assets in the International Rental Car (“RAC”) Segment
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s indefinite-lived intangible tradename assets impairment review processes.
−Removed: 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 impairment test.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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, the terminal period revenue growth rates and the weighted average cost of capital.
+Added: Auditing the public liability, property damage, and liability insurance supplement components of the self-insured liability reserves is complex and required the involvement of our actuarial specialists due to the significant valuation uncertainty associated with the estimates, management’s application of complex judgments, and the use of actuarial methods.
+Added: In addition, the public liability, property damage, and liability insurance supplement self-insured liability reserve estimates are sensitive to management’s assumptions related to rental volume, actuarial evaluations of historical claim experience and trends, and future projections of ultimate losses used in the computation of these self-insured liabilities.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s public liability, property damage, and liability insurance supplement self-insured liability estimation process.
+Added: For example, we tested controls over management’s review of the assumptions outlined above that are used in these self-insured liability calculations and the completeness and accuracy of the data underlying these self-insured liabilities.
+Added: To test the valuation of the public liability, property damage, and liability insurance supplement self-insured liability reserves, we performed audit procedures that included involving our internal actuarial specialists to assist us in developing an independent range and evaluating the methods used by management and the reasonableness of assumptions used in their models (e.g., actuarial evaluations of historical claim experience and future projections of ultimate losses).
+Added: We compared the Company's reserve to estimates of the liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.
/s/ Ernst & Young LLP
8 unchanged sentences
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, 2022, based on the COSO criteria.
−Removed: 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.
+Added: 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, 2022 and 2021, 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, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 7, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
27 unchanged sentences
Total restricted cash and cash equivalents 475 393
−Removed: Total cash, cash equivalents, restricted cash and restricted cash equivalents 2,651 1,507
+Added: Total cash and cash equivalents and restricted cash and cash equivalents 1,418 2,651
Vehicle 111 62
10 unchanged sentences
Goodwill 1,044 1,045
−Removed: Assets held for sale — 1,811
Total assets (1)
14 unchanged sentences
Deferred income taxes, net 1,360 1,010
−Removed: Total liabilities not subject to compromise 16,806 10,419
−Removed: Liabilities subject to compromise — 4,965
−Removed: Liabilities held for sale — 1,431
Total liabilities (1)
9 unchanged sentences
Accumulated other comprehensive income (loss) ( 294 ) ( 214 )
−Removed: Stockholders' equity attributable to Hertz Global 2,977 56
−Removed: Noncontrolling interests — 37
Total stockholders' equity 2,645 2,977
Total liabilities and stockholders' equity $ 22,497 $ 19,783
−Removed: (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.
−Removed: 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.
+Added: (1) Hertz Global Holdings, Inc.'s consolidated total assets as of December 31, 2022 and December 31, 2021 include total assets of variable interest entities ("VIEs") of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
+Added: Hertz Global Holdings, Inc.'s consolidated total liabilities as of December 31, 2022 and December 31, 2021 include total liabilities of VIEs of $ 1.3 billion and $ 733 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc.
See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.
8 unchanged sentences
Direct vehicle and operating 4,808 3,920 3,423
−Removed: Depreciation of revenue earning vehicles and lease charges
−Removed: 497 2,030 2,563
+Added: Depreciation of revenue earning vehicles and lease charges, net 701 497 2,030
Non-vehicle depreciation and amortization 142 196 225
3 unchanged sentences
Non-vehicle (excludes contractual interest of $ 129 million for the year ended December 31, 2020)
−Removed: Total interest expense, net 469 608 805
+Added: Interest expense, net 328 469 608
Technology-related intangible and other asset impairments — — 213
45 unchanged sentences
(In millions)
−Removed: Mezzanine Equity
−Removed: Preferred Stock Shares Preferred Stock Amount Common Stock Shares Common Stock Amount Additional
−Removed: Paid-In Capital Retained Earnings (Accumulated
+Added: Mezzanine Equity Retained Earnings (Accumulated
Deficit) Accumulated
Comprehensive
−Removed: Income (Loss) Treasury Stock Shares Treasury Stock Amount Stockholders' Equity Attributable to Hertz Global Non-
+Added: Income (Loss) Stockholders' Equity Attributable to Hertz Global
+Added: Preferred Stock Shares Preferred Stock Amount Common Stock Shares Common Stock Amount Additional
+Added: Paid-In Capital Treasury Stock Shares Treasury Stock Amount Non-
controlling Interests Total Stockholders' Equity
5 unchanged sentences
Stock-based compensation charges — — — — ( 2 ) — — — — ( 2 ) — ( 2 )
−Removed: 2019 Rights Offering, net — — 58 — 748 — — — — 748 — 748
−Removed: Contributions from noncontrolling interests — — — — — — — — — — 52 52
−Removed: December 31, 2019 — — 142 1 3,024 ( 967 ) ( 189 ) 2 ( 100 ) 1,769 119 1,888
−Removed: Net income (loss) — — — — — ( 1,714 ) — — — ( 1,714 ) ( 9 ) ( 1,723 )
−Removed: Other comprehensive income (loss) — — — — — — ( 23 ) — — ( 23 ) — ( 23 )
−Removed: Net settlement on vesting of restricted stock — — — — ( 3 ) — — — — ( 3 ) — ( 3 )
−Removed: Stock-based compensation charges — — — — ( 2 ) — — — — ( 2 ) — ( 2 )
ATM Program, net — — 14 1 28 — — — — 29 — 29
19 unchanged sentences
December 31, 2021 — — 450 5 6,209 ( 2,315 ) ( 214 ) 27 ( 708 ) 2,977 — 2,977
+Added: Net income (loss) — — — — — 2,059 — — — 2,059 — 2,059
+Added: Other comprehensive income (loss) — — — — — — ( 80 ) — — ( 80 ) — ( 80 )
+Added: Stock-based compensation charges, net of tax — — — — 131 — — — — 131 — 131
+Added: Net settlement on vesting of restricted stock — — — — ( 20 ) — — — — ( 20 ) — ( 20 )
+Added: Public Warrant exercises — — — — 6 — — — — 6 — 6
+Added: Shares repurchases — — ( 127 ) — — — — 128 ( 2,428 ) ( 2,428 ) — ( 2,428 )
+Added: December 31, 2022 — $ — 323 $ 5 $ 6,326 $ ( 256 ) $ ( 294 ) 155 $ ( 3,136 ) $ 2,645 $ — $ 2,645
The accompanying notes are an integral part of these financial statements.
1 unchanged sentence
Also see Note 19, "Public Warrants - Hertz Global."
−Removed: (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."
+Added: (2) See Nasdaq Listing and Share Repurchase Programs for Common Stock in Note 17, "Equity – Hertz Global."
(3) Effective October 31, 2021, the 767 lease agreement was terminated.
10 unchanged sentences
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
−Removed: Depreciation and reserves for revenue earning vehicles 600 2,259 2,791
+Added: Depreciation and reserves for revenue earning vehicles, net 809 600 2,259
Depreciation and amortization, non-vehicle 142 196 225
7 unchanged sentences
(Gain) loss from the sale of a business — ( 400 ) —
−Removed: (Gain) loss on marketable securities — — ( 30 )
(Gain) loss on sale of non-vehicle capital assets ( 5 ) ( 8 ) ( 24 )
Change in fair value of Public Warrants ( 704 ) 627 —
+Added: (Gain) loss on financial instruments ( 111 ) ( 4 ) ( 3 )
Other 11 ( 1 ) 8
13 unchanged sentences
Non-vehicle capital asset expenditures ( 150 ) ( 71 ) ( 98 )
−Removed: Proceeds from non-vehicle capital assets disposed of or to be disposed of 16 60 27
+Added: Proceeds from disposal of non-vehicle capital assets 12 16 60
Sales of marketable securities — — 74
1 unchanged sentence
Collateral returned in exchange for letters of credit 19 280 —
+Added: Return of (investment in) equity investments ( 16 ) — —
Proceeds from the sale of a business, net of cash sold — 871 —
20 unchanged sentences
Contributions from (distributions to) noncontrolling interests — ( 38 ) ( 75 )
−Removed: Proceeds from rights offerings, net 1,639 — 748
+Added: Proceeds from 2021 Rights Offering, net — 1,639 —
Share repurchases ( 2,461 ) ( 654 ) —
Repurchase of preferred stock — ( 1,883 ) —
−Removed: Payments for Nasdaq listing costs ( 9 ) — —
Other ( 20 ) ( 9 ) ( 2 )
Net cash provided by (used in) financing activities 487 2,845 ( 5,372 )
−Removed: Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents ( 34 ) 46 1
−Removed: Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 1,073 218 ( 50 )
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period (1)
+Added: Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents ( 25 ) ( 34 ) 46
+Added: Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period ( 1,233 ) 1,073 218
+Added: Cash and cash equivalents and restricted cash and cash equivalents at beginning of period (1)
2,651 1,578 1,360
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period (1)
+Added: Cash and cash equivalents and restricted cash and cash equivalents at end of period (1)
$ 1,418 $ 2,651 $ 1,578
9 unchanged sentences
Sales of revenue earning vehicles included in vehicle receivables 85 33 144
−Removed: Fleet payables included in liabilities subject to compromise — 2 —
Purchases of non-vehicle capital assets included in accounts payable 23 24 7
−Removed: Revenue earning vehicles and non-vehicle capital assets acquired through capital leases 79 32 23
+Added: Revenue earning vehicles and non-vehicle capital assets acquired through finance leases 15 79 32
Purchases of non-vehicle capital assets included in liabilities subject to compromise — — 18
Operating lease right-of-use assets obtained in exchange for lease liabilities 614 177 152
−Removed: Public Warrant issuance 800 — —
+Added: Public Warrants issuance — 800 —
Public Warrant exercises 3 103 —
1 unchanged sentence
Accrual for purchases of treasury shares 21 54 —
−Removed: (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."
+Added: (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 disclosed in Note 3, "Divestitures."
The accompanying notes are an integral part of these financial statements.
8 unchanged sentences
Total restricted cash and cash equivalents 475 393
−Removed: Total cash, cash equivalents, restricted cash and restricted cash equivalents 2,650 1,479
+Added: Total cash and cash equivalents and restricted cash and cash equivalents 1,418 2,650
Vehicle 111 62
1 unchanged sentence
Total receivables, net 974 757
−Removed: Due from Hertz Holdings — 1
Prepaid expenses and other assets 1,154 1,016
7 unchanged sentences
Goodwill 1,044 1,045
−Removed: Assets held for sale — 1,811
Total assets (1)
$ 22,496 $ 19,780
−Removed: LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
+Added: LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable:
10 unchanged sentences
Deferred income taxes, net 1,363 1,012
−Removed: Total liabilities not subject to compromise 15,430 10,424
−Removed: Liabilities subject to compromise — 5,030
−Removed: Liabilities held for sale — 1,431
Total liabilities (1)
1 unchanged sentence
Commitments and contingencies
−Removed: Stockholder's equity (deficit):
+Added: Stockholder's equity:
Common stock, $ 0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding
2 unchanged sentences
Accumulated other comprehensive income (loss) ( 294 ) ( 214 )
−Removed: Stockholder's equity (deficit) attributable to Hertz 4,350 ( 42 )
−Removed: Noncontrolling interests — 37
−Removed: Total stockholder's equity (deficit) 4,350 ( 5 )
−Removed: Total liabilities and stockholder's equity (deficit) $ 19,780 $ 16,880
−Removed: (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.
−Removed: 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.
+Added: Total stockholder's equity 3,279 4,350
+Added: Total liabilities and stockholder's equity $ 22,496 $ 19,780
+Added: (1) The Hertz Corporation's consolidated total assets as of December 31, 2022 and December 31, 2021 include total assets of VIEs of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
+Added: The Hertz Corporation's consolidated total liabilities as of December 31, 2022 and December 31, 2021 include total liabilities of VIEs of $ 1.3 billion and $ 733 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation.
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 unchanged sentences
Direct vehicle and operating 4,808 3,920 3,423
−Removed: Depreciation of revenue earning vehicles and lease charges
−Removed: 497 2,030 2,563
+Added: Depreciation of revenue earning vehicles and lease charges, net 701 497 2,030
Non-vehicle depreciation and amortization 142 196 225
3 unchanged sentences
Non-vehicle (excludes contractual interest of $ 129 million for the year ended December 31, 2020)
−Removed: Total interest expense, net 469 606 798
+Added: Interest expense, net 328 469 606
Technology-related intangible and other asset impairments — — 213
34 unchanged sentences
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)
−Removed: (In millions)
+Added: (In millions, except for share data)
Common Stock Shares Common Stock Amount Additional
8 unchanged sentences
Due from Hertz Holdings — — — ( 4 ) — — ( 4 ) — ( 4 )
−Removed: Stock-based compensation charges — — 18 — — — 18 — 18
−Removed: Contributions from Hertz Holdings — — 750 — — — 750 — 750
−Removed: Contributions from noncontrolling interests — — — — — — — 52 52
−Removed: December 31, 2019 100 — 3,955 ( 64 ) ( 1,937 ) ( 189 ) 1,765 119 1,884
−Removed: Net income (loss) — — — — ( 1,846 ) — ( 1,846 ) ( 9 ) ( 1,855 )
−Removed: Other comprehensive income (loss) — — — — — ( 23 ) ( 23 ) — ( 23 )
−Removed: Due from Hertz Holdings — — — ( 4 ) — — ( 4 ) — ( 4 )
Liabilities subject to compromise (1)
16 unchanged sentences
December 31, 2021 100 — 7,190 — ( 2,626 ) ( 214 ) 4,350 — 4,350
+Added: Net income (loss) — — — — 1,355 — 1,355 — 1,355
+Added: Other comprehensive income (loss) — — — — — ( 80 ) ( 80 ) — ( 80 )
+Added: Stock-based compensation charges, net of tax — — 131 — — — 131 — 131
+Added: Dividends to Hertz Holdings (3)
+Added: — — ( 2,477 ) — — — ( 2,477 ) — ( 2,477 )
+Added: December 31, 2022 100 $ — $ 4,844 $ — $ ( 1,271 ) $ ( 294 ) $ 3,279 $ — $ 3,279
(1) See Note 16, "Related Party Transactions."
1 unchanged sentence
See Note 3, "Divestitures."
+Added: (3) See "Share Repurchase Programs for Common Stock" in Note 17, "Equity – Hertz Global," for additional information.
The accompanying notes are an integral part of these financial statements.
7 unchanged sentences
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
−Removed: Depreciation and reserves for revenue earning vehicles 600 2,259 2,791
+Added: Depreciation and reserves for revenue earning vehicles, net 809 600 2,259
Depreciation and amortization, non-vehicle 142 196 225
8 unchanged sentences
(Gain) loss from the sale of a business — ( 400 ) —
−Removed: (Gain) loss on marketable securities — — ( 30 )
(Gain) loss on sale of non-vehicle capital assets ( 5 ) ( 8 ) ( 24 )
+Added: (Gain) loss on financial instruments ( 111 ) ( 4 ) ( 3 )
Other 11 ( 1 ) 8
13 unchanged sentences
Non-vehicle capital asset expenditures ( 150 ) ( 71 ) ( 98 )
−Removed: Proceeds from non-vehicle capital assets disposed of or to be disposed of 16 60 27
+Added: Proceeds from disposal of non-vehicle capital assets 12 16 60
Sales of marketable securities — — 74
2 unchanged sentences
Proceeds from the sale of a business, net of cash sold — 871 —
+Added: Return of (investment in) equity investments ( 16 ) — —
Other — ( 1 ) ( 1 )
4 unchanged sentences
Proceeds from issuance of non-vehicle debt — 4,644 1,812
−Removed: Repayments of non-vehicle debt ( 6,352 ) ( 855 ) ( 3,732 )
THE HERTZ CORPORATION AND SUBSIDIARIES
3 unchanged sentences
2022 2021 2020
+Added: Repayments of non-vehicle debt ( 20 ) ( 6,352 ) ( 855 )
Payment of financing costs ( 48 ) ( 185 ) ( 75 )
5 unchanged sentences
Net cash provided by (used in) financing activities 488 2,872 ( 5,403 )
−Removed: Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents ( 34 ) 46 1
−Removed: Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 1,100 190 ( 50 )
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period (1)
+Added: Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents ( 25 ) ( 34 ) 46
+Added: Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period ( 1,232 ) 1,100 190
+Added: Cash and cash equivalents and restricted cash and cash equivalents at beginning of period (1)
2,650 1,550 1,360
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period (1)
+Added: Cash and cash equivalents and restricted cash and cash equivalents at end of period (1)
$ 1,418 $ 2,650 $ 1,550
9 unchanged sentences
Sales of revenue earning vehicles included in vehicle receivables 85 33 144
−Removed: Fleet payables included in liabilities subject to compromise — 2 —
Purchases of non-vehicle capital assets included in accounts payable 23 24 7
−Removed: Revenue earning vehicles and non-vehicle capital assets acquired through capital leases 79 32 23
+Added: Revenue earning vehicles and non-vehicle capital assets acquired through finance leases 15 79 32
Purchases of non-vehicle capital assets included in liabilities subject to compromise — — 18
1 unchanged sentence
Non-cash capital contribution from Hertz Holdings — 65 —
−Removed: (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 ."
+Added: (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 disclosed in Note 3, "Divestitures."
The accompanying notes are an integral part of these financial statements.
7 unchanged sentences
Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918.
−Removed: Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-owned, licensee and franchisee locations in the U.S., Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand.
+Added: Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-operated, licensee and franchisee locations in the U.S., Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand.
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.
−Removed: Chapter 11 and Emergence
−Removed: In March 2020, the World Health Organization declared COVID-19 a global pandemic.
−Removed: 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.
−Removed: 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.
−Removed: In response, the Company began aggressive actions to eliminate costs.
−Removed: 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.
−Removed: On the Petition Date, the Debtors filed petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
−Removed: The Chapter 11 Cases were jointly administered for procedural purposes only under the caption In re The Hertz Corporation, et al., Case No.
−Removed: 20-11218 (MFW) .
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court.
−Removed: On the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11.
−Removed: On the Effective Date, as a result of the Plan of Reorganization, the reorganized Company received cash proceeds of $ 7.5 billion comprised of:
−Removed: • $ 2.8 billion from the purchase of common stock in reorganized Hertz Global by the Plan Sponsors and certain other investment funds and entities;
−Removed: • $ 1.6 billion from the purchase of common stock in reorganized Hertz Global pursuant to the 2021 Rights Offering;
−Removed: • $ 1.5 billion (less a 2 % upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo;
−Removed: • $ 1.5 billion in proceeds from the Company's secured exit term loan facilities (the "Term Loans").
−Removed: 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:
−Removed: • the holders of administrative, priority and secured claims received payment in cash in full;
−Removed: • 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;
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: • 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;
−Removed: • the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;
−Removed: • the holders of the Company's € 725 million European Vehicle Notes received payment in cash in full;
−Removed: • the holders of the € 257 million term loan facility incurred by Hertz International Ltd.
−Removed: received payment in cash in full;
−Removed: • 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
−Removed: • 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.
−Removed: 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.
−Removed: 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.
−Removed: Pursuant to the EPCA, certain parties agreed to purchase all unsubscribed shares in the 2021 Rights Offering (the "Backstop Parties").
−Removed: 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).
−Removed: Hertz Global closed the 2021 Rights Offering upon emergence from the Chapter 11 Cases on the Effective Date.
−Removed: 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).
−Removed: As a result of these transactions, on the Effective Date, Hertz Global issued 471,102,462 shares of common stock as follows:
−Removed: • 14,133,024 shares to existing stockholders;
−Removed: • 277,119,438 shares to Plan Sponsors pursuant to the EPCA;
−Removed: • 127,362,114 shares to eligible participants pursuant to the Rights Offering;
−Removed: • 52,487,886 shares to the Backstop Parties pursuant to the EPCA.
−Removed: 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 .
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate.
−Removed: 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").
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On the Effective Date, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S.
−Removed: ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization.
−Removed: See Note 6, "Debt," for additional information.
−Removed: NYSE Delisting and Nasdaq Listing
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On November 8, 2021, reorganized Hertz Global successfully completed its Nasdaq listing, in which shares of its new common stock were registered with the SEC for a public offering by certain selling stockholders.
−Removed: On November 9, 2021, reorganized Hertz Global's common stock and Public Warrants began trading on Nasdaq under the trading symbols "HTZ" and "HTZWW," respectively.
−Removed: See Note 16 , " Equity and Mezzanine Equity – Hertz Global."
+Added: On May 22, 2020, as a result of the impact from the COVID-19 global pandemic, the Debtors filed voluntary petitions for relief under Chapter 11 of the U.S.
+Added: Bankruptcy Code in the Bankruptcy Court.
+Added: On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court and on June 30, 2021, the Plan of Reorganization became effective and the Debtors emerged from Chapter 11.
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.
−Removed: 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.
−Removed: 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
3 unchanged sentences
Certain prior period amounts have been reclassified to conform with current period presentation.
−Removed: Non-vehicle depreciation expense is now reported on a separate line item in the consolidated statement of operations for all periods presented.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Principles of Consolidation
6 unchanged sentences
All significant intercompany transactions are eliminated in consolidation.
−Removed: Accounting Standards Codification 852 - Reorganizations
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: See Note 20, "Liabilities Subject to Compromise," for additional information.
−Removed: 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.
−Removed: See Note 21, "Reorganization Items, Net," for additional information.
−Removed: Under Topic 852, companies must apply “fresh-start” accounting rules upon emergence from Chapter 11 reorganization if certain conditions are met.
−Removed: The Company did not qualify for "fresh-start" accounting under Topic 852 upon emergence from Chapter 11.
Use of Estimates and Assumptions
2 unchanged sentences
Actual results could differ materially from those estimates.
−Removed: Significant estimates inherent in the preparation of the consolidated financial statements include depreciation of revenue earning vehicles, reserves for litigation and other contingencies, accounting for income taxes and related uncertain tax positions, pension and postretirement benefit costs, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and intangible assets including goodwill, valuation of stock-based compensation, self-insured liabilities, allowance for doubtful accounts, the retail value of loyalty points, and fair value of financial instruments, among others.
+Added: Significant estimates inherent in the preparation of the consolidated financial statements include depreciation of revenue earning vehicles, reserves for litigation and other contingencies, accounting for income taxes and related uncertain tax positions, pension and postretirement benefit costs, the recoverability of long-lived assets, useful lives and impairment of long-lived tangible and indefinite-lived intangible assets including goodwill, valuation of stock-
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: based compensation, self-insured liabilities, allowance for doubtful accounts, the retail value of loyalty points, and fair value of financial instruments, among others.
Revenue Earning Vehicles
2 unchanged sentences
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).
−Removed: 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 .
+Added: The Company also estimates the residual value of the applicable revenue earning vehicles at the expected time of disposal, taking into consideration factors such as make, model and options, age, physical condition, mileage, sale location, time of the year and market conditions.
Depreciation is recorded over the estimated holding period.
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.
−Removed: Gains and losses on the sale of vehicles, including the costs
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: associated with disposals, are included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.
−Removed: 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.
−Removed: Guaranteed depreciation programs guarantee on an aggregate basis the residual value of the program vehicle upon sale according to certain parameters which include the holding period, mileage and condition of the vehicles.
−Removed: The Company records a provision in accumulated depreciation for excess mileage and vehicle condition, as necessary, during the holding period.
−Removed: Donlen's revenue earning vehicles were leased under long term agreements with its customers.
−Removed: 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.
−Removed: Donlen accounted for its lease contracts using the appropriate lease classifications.
−Removed: The Donlen business was sold on March 30, 2021, as disclosed in Note 3 , " Divestitures ."
−Removed: 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.
+Added: 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.
+Added: For program vehicles, the manufacturers agree to repurchase the 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.
+Added: Vehicle repurchase programs guarantee on an aggregate basis the residual value of the program vehicle upon sale according to certain parameters which include the holding period, mileage and condition of the vehicles.
Self-insured Liabilities
−Removed: Self-insured liabilities in the accompanying consolidated balance sheets include public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and worker's compensation.
+Added: Self-insured liabilities in the accompanying consolidated balance sheets include public liability, property damage, general liability, liability insurance supplement, personal accident insurance, and workers' compensation.
These represent an estimate for both reported accident claims not yet paid, and claims incurred but not yet reported and are recorded on an undiscounted basis.
Reserve requirements are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses and administrative costs.
−Removed: The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes.
+Added: The adequacy of the liability is monitored quarterly based on evolving accident claim history and insurance related state legislation changes.
If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.
5 unchanged sentences
Components are aggregated into a single reporting unit when they have similar economic characteristics.
−Removed: 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.
−Removed: Accordingly, prior periods have been restated to conform with the revised presentation.
−Removed: 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:
+Added: The Company has identified two reporting units (operating segments):
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.
−Removed: Discount rates are set by using the
+Added: Discount rates are determined based on the reporting unit's WACC.
+Added: The Company’s discounted cash flow projections are based upon reasonable and appropriate assumptions about the underlying business activities of the Company’s reporting units.
+Added: In the impairment analysis for an indefinite-lived intangible asset, the Company compares the carrying value of the asset to its estimated fair value and recognizes an impairment charge whenever the carrying amount of the asset
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: WACC methodology.
−Removed: The Company’s discounted cash flows are based upon reasonable and appropriate assumptions about the underlying business activities of the Company’s reporting units.
−Removed: In the impairment analysis for an indefinite-lived intangible asset, the Company compares the carrying value of the asset to its estimated fair value and recognizes an impairment charge whenever the carrying amount of the asset exceeds its estimated fair value.
+Added: exceeds its estimated fair value.
The estimated fair value for a tradename utilizes a relief-from-royalty income approach, which includes the Company’s revenue projections for each asset, along with assumptions for royalty rates, tax rates and WACC.
−Removed: The Company 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.
+Added: The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
+Added: Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.
+Added: The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
+Added: The Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.
+Added: In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations.
+Added: The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
+Added: The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations.
+Added: Accrued interest and penalties are included in the related tax liability line in the accompany consolidated balance sheets.
+Added: The Company has elected to record tax on global intangible low-tax income (“GILTI”) on a current basis.
+Added: "GILTI" is a U.S.
tax on certain earnings of foreign subsidiaries that are subject to foreign tax below a certain threshold.
−Removed: GILTI taxes are recorded in current income tax expense as incurred.
−Removed: In 2018 and 2019, the Company asserted indefinite reinvestment on certain of its foreign earnings.
−Removed: 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."
−Removed: Valuation Allowances
−Removed: The Company’s current and future provision for income taxes is impacted by the initial recognition of and changes in valuation allowances in certain jurisdictions.
−Removed: The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized.
−Removed: The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred in these jurisdictions.
−Removed: Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions.
−Removed: The Company evaluates the realizability of its deferred tax assets on a quarterly basis.
−Removed: In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets is necessary.
−Removed: Such evidence includes the evaluation of historical cumulative earnings and losses in recent years, future reversals of deferred tax liabilities, the availability of carry forwards and the remaining period of the respective carry forward, future taxable income (exclusive of the reversal of temporary differences and carryforwards), and any applicable tax-planning strategies that are available.
−Removed: If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded.
−Removed: If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax expense in the period recognized and subsequent periods.
−Removed: In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.
−Removed: Uncertain Tax Positions
−Removed: The calculation of the Company’s gross unrecognized tax benefits and liabilities includes uncertainties in the application of, and changes in, complex tax regulations in a multitude of jurisdictions across its global operations.
−Removed: The Company recognizes tax benefits and liabilities based on its estimates of whether, and the extent to which, additional taxes will be due.
−Removed: The Company adjusts these benefits and liabilities based on changing facts and circumstances;
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Revenue Recognition
−Removed: In February 2016, the FASB issued guidance that replaced the existing lease guidance in U.S.
−Removed: GAAP and in 2018 and 2019 issued amendments and updates to the new lease standard (collectively "Topic 842").
−Removed: 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, as further updated in 2021.
The Company recognizes two types of revenue:
10 unchanged sentences
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.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Loyalty Programs - The Company offers loyalty programs, primarily Hertz Gold Plus Rewards, wherein customers are eligible to earn loyalty points that are redeemable for free rental days or can be converted to loyalty points for redemption of products and services under loyalty programs of other companies.
−Removed: 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.
+Added: 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.
6 unchanged sentences
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.
−Removed: 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
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: representing a percentage of net sales of the franchised business.
+Added: 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.
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.
3 unchanged sentences
These revenues exclude the sale price of the vehicle which is a component of the gain or loss on the disposition and is included in depreciation of revenue earning vehicles and lease charges in the accompanying consolidated statements of operations.
−Removed: Fleet Leasing and Fleet Management Revenue
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Such TRAC adjustments were considered variable charges.
−Removed: Fleet management services were comprised of fuel purchasing and management, preventive vehicle maintenance, repair consultation, toll management and accident management.
−Removed: 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
2 unchanged sentences
Contract liabilities primarily consist of obligations to customers for prepaid vehicle rentals and related to the Company’s points-based loyalty programs.
−Removed: Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
+Added: Cash and Cash Equivalents and Restricted Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less.
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.
−Removed: Restricted cash and restricted cash equivalents include cash and cash equivalents that are not readily available for use in the Company's operating activities.
−Removed: 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.
−Removed: 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.
−Removed: Deposits held at financial institutions may exceed the amount of insurance provided on such deposits.
−Removed: Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk.
−Removed: The Company limits exposure relating to financial instruments by diversifying the financial instruments among various counterparties, which consist of major financial institutions.
+Added: Restricted cash and cash equivalents include cash and cash equivalents that are not readily available for use in the Company's operating activities.
+Added: Restricted cash and cash equivalents are primarily comprised of proceeds from the disposition of vehicles pledged under the terms of vehicle debt financing arrangements and are restricted for the purchase of revenue earning vehicles and other specified uses under the vehicle debt facilities, cash utilized as credit enhancement under those arrangements, proceeds from the Term Loan C which are utilized to collateralize letters of credit, and certain cash accounts supporting regulatory reserve requirements related to the Company's
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: self-insurance.
+Added: 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.
+Added: Deposits held at financial institutions may exceed the amount of insurance provided on such deposits.
+Added: Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk.
+Added: The Company limits exposure relating to financial instruments by diversifying the financial instruments among various counterparties, which consist of major financial institutions.
Receivables, Net of Allowance
18 unchanged sentences
Depreciation expense for property and equipment, net for the years ended December 31, 2022, 2021 and 2020 was $ 97 million, $ 108 million and $ 129 million, respectively.
−Removed: The Company follows the practice of charging maintenance and repair costs for service vehicles, furniture and fixtures, and equipment, including the cost of minor replacements, to maintenance expense.
+Added: The Company follows the practice of expensing maintenance and repair costs for service vehicles, furniture and fixtures, and equipment, including the cost of minor replacements.
Long-lived Assets, Including Finite-lived Intangible Assets
Finite-lived intangible assets include concession agreements, technology, customer relationships and other intangibles.
−Removed: Long-lived assets and intangible assets with finite lives, including technology-related intangibles, are amortized using the straight-line method over the estimated economic lives of the assets, which range from one to fifty years and two to twenty years , respectively.
−Removed: Long-lived assets and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
−Removed: Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
−Removed: Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset.
−Removed: Long-lived assets to be disposed of are reported at the lower of carrying value or estimated fair value less costs to sell.
+Added: Long-lived assets and intangible assets with finite lives, including technology-related intangibles, are amortized using the straight-line method over the estimated economic lives of the assets, which range from one to forty years and two to fifteen years , respectively.
+Added: Long-lived assets and intangible assets with finite lives are
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.
+Added: Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
+Added: Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset.
+Added: Long-lived assets to be disposed of are reported at the lower of carrying value or estimated fair value less costs to sell.
Stock-Based Compensation
22 unchanged sentences
Financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes.
−Removed: In addition, financial instruments are entered into with a diversified group of major financial institutions in order to manage the Company's exposure to counterparty nonperformance on such instruments.
−Removed: The Company measures all financial instruments at their fair value and does not offset the derivative assets and liabilities in its accompanying consolidated balance sheets.
−Removed: 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.
+Added: In addition, financial instruments are entered into with a diversified group of major
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: financial institutions in order to manage the Company's exposure to counterparty nonperformance on such instruments.
+Added: The Company measures all financial instruments at their fair value and does not offset the derivative assets and liabilities in its accompanying consolidated balance sheets.
+Added: 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
2 unchanged sentences
The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.
−Removed: Foreign currency exchange rate gains and losses resulting from transactions are included in other (income) expense in the accompanying consolidated statements of operations.
+Added: 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 production costs are deferred and expensed when the advertising first takes place.
5 unchanged sentences
Recently Issued Accounting Pronouncements
−Removed: Scope of Reference Rate Reform
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Government Assistance
+Added: In November 2021, the FASB issued guidance that increases the transparency of government assistance transactions.
+Added: The guidance requires disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements.
+Added: The guidance was effective for annual periods beginning after December 15, 2021.
+Added: The Company adopted this guidance on January 1, 2022 on a prospective basis.
+Added: As government assistance transactions were not material, the adoption of this guidance had no impact on the Company's financial position, results of operations or cash flows, and resulted in no associated disclosures.
Note 3— Divestitures
−Removed: 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.
−Removed: On March 30, 2021, the Company completed the sale.
−Removed: 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.
+Added: On March 30, 2021, the Company completed the sale of substantially all of the assets and certain liabilities of its Donlen subsidiary.
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.
−Removed: 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.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
−Removed: 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.
−Removed: The major classes of assets and liabilities held for sale as of December 31, 2020 are presented below at their carrying value.
−Removed: (in millions) December 31, 2020
−Removed: Cash and cash equivalents $ 3
−Removed: Restricted cash and cash equivalents 68
−Removed: Receivables, net 207
−Removed: Prepaid expenses and other assets 28
−Removed: Revenue earning vehicles, net 1,432
−Removed: Property and equipment, net 6
−Removed: Operating lease right-of-use assets 2
−Removed: Intangible assets, net 29
−Removed: Total assets held for sale $ 1,811
−Removed: Accounts payable $ 76
−Removed: Accrued liabilities 19
−Removed: Accrued taxes, net 3
−Removed: Vehicle debt 1,327
−Removed: Operating lease liabilities 6
−Removed: Total liabilities held for sale $ 1,431
Termination of 767 Auto Leasing Agreement
6 unchanged sentences
In 2020, the Company sold marketable securities for $ 74 million and recognized an immaterial gain on the sale in its corporate operations, which was included in other (income) expense, net in the accompanying consolidated statement of operations for the year ended December 31, 2020.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Sale of Non-vehicle Capital Assets
−Removed: In 2019, the Company completed the sale of certain non-vehicle capital assets in its Americas RAC segment 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.
+Added: In 2019, the Company completed the sale of certain non-vehicle capital assets in its Americas RAC segment.
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.
6 unchanged sentences
Revenue earning vehicles, net $ 12,495 $ 9,226
−Removed: (1) Excludes amounts associated with Donlen that are classified as held for sale as of December 31, 2020.
−Removed: See Note 3, "Divestitures," for additional information.
−Removed: (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.
+Added: (1) Represents the carrying amount of vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Depreciation of revenue earning vehicles and lease charges, net includes the following:
+Added: Years ended December 31,
+Added: (In millions) 2022 2021 2020
+Added: Depreciation of revenue earning vehicles $ 1,806 $ 963 $ 2,204
+Added: (Gain) loss on disposal of revenue earning vehicles ( 1,125 ) ( 502 ) ( 213 )
+Added: Rents paid for vehicles leased 20 36 $ 39
+Added: Depreciation of revenue earning vehicles and lease charges, net $ 701 $ 497 $ 2,030
Note 5— Goodwill and Intangible Assets, Net
8 unchanged sentences
This present value model requires management to estimate future cash flows and forecasted EBITDA margins and capital investments of each reporting unit.
−Removed: 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.
4 unchanged sentences
The Company considered consistent factors as described above related to goodwill in addition to royalty rates.
+Added: 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.
+Added: The discount rate used for each indefinite-lived intangible ranged from 14.0 % to 15.5 %.
+Added: All indefinite-lived intangibles were noted to have fair values that exceeded their carrying values, the lowest of which was greater than 25 %.
+Added: Technology-related Intangible and Other Assets
+Added: Due to uncertainty surrounding the Company's financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases, the Company concluded in the second quarter of 2020 that there was an impairment of such technology-related intangible assets and capitalized cloud computing implementation costs and recorded an impairment charge of $ 193 million in its corporate operations representing an impairment of the carrying value of the abandoned portion of such assets as of June 30, 2020.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
−Removed: The discount rate used for each indefinite-lived intangible ranged from 13.0 % to 13.5 %.
−Removed: All indefinite-lived intangibles were noted to have fair values that exceeded their carrying values, the lowest of which was greater than 25 %.
−Removed: Technology-related Intangible and Other Assets
−Removed: Due to uncertainty surrounding the Company's financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases, 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.
−Removed: 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.
The following summarizes the changes in the Company's goodwill by segment:
1 unchanged sentence
Balance as of January 1, 2022
−Removed: $ 1,029 $ 236 $ 1,265
+Added: Goodwill $ 1,029 $ 236 $ 1,265
Accumulated impairment losses
2 unchanged sentences
Goodwill disposal and other changes during the period ( 1 ) — ( 1 )
+Added: ( 1 ) — ( 1 )
Balance as of December 31, 2022
2 unchanged sentences
$ 1,028 $ 16 $ 1,044
−Removed: (1) Excludes goodwill of $ 36 million associated with Donlen that was classified as held for sale as of December 31, 2020.
−Removed: See Note 3, "Divestitures," for additional information.
(In millions) Americas RAC segment International RAC segment Total (1)
Balance as of January 1, 2021
−Removed: Goodwill $ 1,029 $ 236 $ 1,265
+Added: $ 1,029 $ 236 $ 1,265
Accumulated impairment losses
2 unchanged sentences
Goodwill disposal and other changes during the period — — —
−Removed: — ( 2 ) ( 2 )
Balance as of December 31, 2021
41 unchanged sentences
(3) Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.
−Removed: (4) Excludes intangible assets associated with Donlen that were classified as held for sale as of December 31, 2020.
−Removed: See Note 3, "Divestitures," for additional information.
Years Ended December 31,
9 unchanged sentences
The Company's debt, including its available credit facilities, consists of the following ($ in millions) as of December 31, 2022 and 2021:
−Removed: The table and disclosures below exclude debt associated with Donlen that was classified as held for sale as of December 31, 2020.
−Removed: See Note 3, "Divestitures," for additional information.
Facility Weighted-Average Interest Rate as of December 31, 2022 Fixed or
9 unchanged sentences
7.81 % Fixed Various 9 16
−Removed: Senior Secured Superpriority Debtor-in-Possession Credit Agreement N/A N/A N/A — 250
Unamortized Debt Issuance Costs and Net (Discount) Premium
( 58 ) ( 69 )
−Removed: Total Non-Vehicle Debt Not Subject to Compromise 2,986 243
−Removed: Non-Vehicle Debt Subject to Compromise (2)
−Removed: Senior Term Loan N/A N/A N/A — 656
−Removed: Senior RCF N/A N/A N/A — 615
−Removed: Senior Notes (2)
−Removed: N/A N/A N/A — 2,700
−Removed: Senior Second Priority Secured Notes N/A N/A N/A — 350
−Removed: Promissory Notes N/A N/A N/A — 27
−Removed: Alternative Letter of Credit Facility (3)
−Removed: N/A N/A N/A — 114
−Removed: Senior RCF Letter of Credit Facility N/A N/A N/A — 17
−Removed: Unamortized Debt Issuance Costs and Net (Discount) Premium
−Removed: Total Non-Vehicle Debt Subject to Compromise — 4,443
+Added: Total Non-Vehicle Debt 2,977 2,986
Vehicle Variable Funding Notes
1 unchanged sentence
5.79 % Floating 6/2024 2,363 2,813
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Facility Weighted-Average Interest Rate as of December 31, 2021 Fixed or
−Removed: Rate Maturity December 31,
−Removed: 2021 December 31,
HVF III Series 2021-A Class B (2)
5 unchanged sentences
2.12 % Fixed 12/2026 2,000 2,000
−Removed: Vehicle Variable Funding Notes
−Removed: HVF II Series 2013-A (5)
−Removed: N/A N/A N/A — 1,940
−Removed: Vehicle Medium Term Notes
−Removed: HVF II Series 2015-3 N/A N/A N/A — 163
−Removed: HVF II Series 2016-2 N/A N/A N/A — 263
−Removed: HVF II Series 2016-4 N/A N/A N/A — 187
−Removed: HVF II Series 2017-1 N/A N/A N/A — 199
−Removed: HVF II Series 2017-2 N/A N/A N/A — 164
−Removed: HVF II Series 2018-1 N/A N/A N/A — 468
−Removed: HVF II Series 2018-2 N/A N/A N/A — 94
−Removed: HVF II Series 2018-3 N/A N/A N/A — 95
−Removed: HVF II Series 2019-1 N/A N/A N/A — 330
−Removed: HVF II Series 2019-2 N/A N/A N/A — 354
−Removed: HVF II Series 2019-3 N/A N/A N/A — 352
+Added: HVF III Series 2022-1 (2)
+Added: 2.44 % Fixed 6/2025 750 —
+Added: HVF III Series 2022-2 (2)
+Added: 2.42 % Fixed 6/2027 652 —
+Added: HVF III Series 2022-3 (2)
+Added: 3.89 % Fixed 3/2024 383 —
+Added: HVF III Series 2022-4 (2)
+Added: 4.22 % Fixed 9/2025 667 —
+Added: HVF III Series 2022-5 (2)
+Added: 4.03 % Fixed 9/2027 317 —
Vehicle Debt - Other
−Removed: European Vehicle Notes (6)
−Removed: N/A N/A N/A — 888
+Added: Repurchase Facility 6.17 % Fixed 1/2023 86 —
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Facility Weighted-Average Interest Rate as of December 31, 2022 Fixed or
+Added: Rate Maturity December 31,
+Added: 2022 December 31,
European ABS (2)
9 unchanged sentences
Unamortized Debt Issuance Costs and Net (Discount) Premium ( 62 ) ( 33 )
−Removed: Total Vehicle Debt Not Subject to Compromise 7,921 6,024
−Removed: Total Debt Not Subject to Compromise $ 10,907 $ 6,267
+Added: Total Vehicle Debt 10,886 7,921
+Added: Total Debt $ 13,863 $ 10,907
N/A - Not applicable
−Removed: (1) Other non-vehicle debt is primarily comprised of $ 12 million in capital lease obligations .
−Removed: (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.
−Removed: On the Effective Date, in
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: accordance with the Plan of Reorganization, the Senior Notes were repaid in full and terminated.
−Removed: 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.
−Removed: Hertz disputes that any such amounts are owed and on August 2, 2021 filed a motion to dismiss the complaint.
−Removed: On December 23, 2021, the Company's motion to dismiss was granted by the Bankruptcy Court.
−Removed: See Note 14, "Contingencies and Off-Balance Sheet Commitments," for additional information.
−Removed: (In millions) Outstanding Principal
−Removed: Senior Notes December 31, 2021 December 31, 2020
−Removed: 6.250 % Senior Notes due October 2022
−Removed: 5.500 % Senior Notes due October 2024
−Removed: 7.125 % Senior Notes due August 2026
−Removed: 6.000 % Senior Notes due January 2028
−Removed: (3) Includes default interest as of December 31, 2020.
+Added: (1) Other non-vehicle debt is primarily comprised of $ 6 million and $ 12 million in finance lease obligations as of December 31, 2022 and 2021, respectively.
(2) 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.
−Removed: (5) Includes default interest as of December 31, 2020, which was comprised of an increase in the contractual spread.
−Removed: (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.
−Removed: Dollars at a rate of 1.22 to 1 as of December 31, 2020) set forth in the table below.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were repaid in full and cancelled.
−Removed: (In millions) Outstanding Principal
−Removed: European Vehicle Notes December 31, 2021 December 31, 2020
−Removed: 4.125 % Senior Notes due October 2021
−Removed: 5.500 % Senior Notes due March 2023
−Removed: Chapter 11 and Emergence
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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").
−Removed: 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.
−Removed: 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.
−Removed: ABS Program and the HVIF U.S.
−Removed: ABS Program were repaid in full and cancelled, as further disclosed below.
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Non-Vehicle Debt
First Lien Credit Agreement
−Removed: 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:
+Added: Pursuant to the Plan of Reorganization, on the Effective Date, Hertz entered into the First Lien Credit Agreement that provided for the following:
• Term B Loan for term loans in an aggregate principal amount of $ 1.3 billion;
1 unchanged sentence
• the First Lien RCF for revolving loans and letters of credit up to an aggregate principal amount of $ 1.3 billion.
−Removed: 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;
−Removed: (ii) pay fees, expenses and costs associated with the consummation of the Plan of Reorganization;
−Removed: (iii) fund distributions required in connection with the Plan of Reorganization;
−Removed: (iv) provide funds for working capital and general corporate purposes;
−Removed: and (v) backstop or replace existing letters of credit.
−Removed: Term B Loan and Term C Loan (collectively, the "Term Loans") :
+Added: Term B Loan and Term C Loan :
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.
8 unchanged sentences
ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50 %.
−Removed: The First Lien RCF includes provisions for a transition to an alternative benchmark index other than LIBOR.
+Added: The First Lien RCF includes provisions for a transition to an alternative benchmark
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: index other than LIBOR and in March 2022, the First Lien RCF was amended to change the benchmark from USD LIBOR to the Secured Overnight Financing Rate ("SOFR") based rate.
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.
2 unchanged sentences
The First Lien RCF matures on June 30, 2026.
+Added: In March 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.3 billion to $ 1.5 billion and the sublimit for letters of credit from $ 1.1 billion to $ 1.4 billion and amended the First Lien RCF to change the benchmark from USD LIBOR to the SOFR based rate.
+Added: In May 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.5 billion to $ 1.7 billion and the sublimit for letters of credit from $ 1.4 billion to $ 1.6 billion.
+Added: In June 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $ 1.7 billion to $ 1.9 billion and the sublimit for letters of credit from $ 1.6 billion to $ 1.8 billion.
+Added: In July 2022, Hertz increased the aggregate committed amount of the First Lien RCF by $ 55 million where the aggregate committed amount remains at $ 1.9 billion and the sublimit for letters of credit by $ 55 million where the aggregate sublimit remains at $ 1.8 billion.
2021 Senior Notes
3 unchanged sentences
Proceeds from the issuance of the Senior Notes Due 2026 and the Senior Notes Due 2029 were contributed to Hertz Global through a dividend distribution from Hertz to repurchase all outstanding shares of Hertz Global's Series A Preferred Stock.
−Removed: See Note 16, "Equity and Mezzanine Equity – Hertz Global."
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: DIP Credit Agreement
−Removed: On October 29, 2020, the Bankruptcy Court entered an order authorizing the Debtors to obtain certain debtor-in-possession financing (the "DIP Order").
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: On February 16, 2021, Hertz borrowed an additional $ 250 million as per the minimum draw requirements of the DIP Credit Agreement.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the DIP Credit Agreement was paid in full and terminated.
−Removed: Senior Facilities
−Removed: 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.
−Removed: Senior Notes and Senior Second Priority Secured Notes
−Removed: 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.
−Removed: Promissory Notes
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the Promissory Notes were paid in full and terminated.
−Removed: Alternative Letter of Credit Facility
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the Alternative Letter of Credit Facility was paid in full and terminated.
−Removed: HIL Credit Agreement
−Removed: 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.
−Removed: 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.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the Second HIL Credit Agreement was paid in full and terminated.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: See Note 17, "Equity – Hertz Global."
In June 2021, Hertz established a securitization platform, the HVF III U.S.
7 unchanged sentences
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”).
+Added: 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.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: References to the "HVF III U.S.
+Added: ABS Program" include HVF III's U.S.
+Added: Vehicle Variable Funding Notes and HVF III's U.S.
+Added: Vehicle Medium Term Notes.
+Added: Vehicle Variable Funding Notes
HVF III Series 2021-A Notes:
−Removed: In June 2021, Hertz issued the Series 2021-A Class A Notes with a maximum principal amount of up to $ 2.8 billion.
+Added: In June 2021, Hertz issued the Series 2021-A Class A Notes with an initial 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.
−Removed: The HVF III Series 2021- A Notes have a maturity date of June 2023.
+Added: The HVF III Series 2021- A Notes had an original maturity date of June 2023.
+Added: In March 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.0 billion to $ 3.2 billion.
+Added: In May 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.2 billion to $ 3.6 billion.
+Added: In June 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.6 billion to $ 3.8 billion.
+Added: Additionally, the maturity date of the Series 2021-A Notes Class A Notes was extended to June 2024.
+Added: In July 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $ 3.8 billion to $ 3.9 billion.
+Added: Vehicle Medium Term Notes
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.
−Removed: 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.
−Removed: There is subordination within the Series 2021-2 Notes based on class.
−Removed: In June 2021, in connection with the issuance of the HVF III Series 2021 Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.
−Removed: 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").
−Removed: The manufacturer rebates associated with HVF and HVIF were transferred to HVF III as part of the purchase agreements with HVF and HVIF.
−Removed: 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 :
−Removed: 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.
−Removed: 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.
−Removed: Any remaining funds are expected to be used for the future purchase or refinancing of vehicles to be leased under the Operating Lease.
+Added: 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.
+Added: At the time of issuance, Hertz, an affiliate of HVF III, purchased the Class D Notes in an aggregate principal amount of $ 98 million which were subsequently sold to third parties in July and August 2022.
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.
−Removed: There is subordination within the
+Added: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 98 million.
+Added: HVF III Series 2022-3 Notes :
+Added: In March 2022, Hertz issued the Series 2022-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 383 million.
+Added: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 50 million which were subsequently sold to third parties in July 2022.
+Added: HVF III Series 2022-4 Notes :
+Added: In March 2022, Hertz issued the Series 2022-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 667 million.
+Added: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 87 million which were subsequently sold to third parties in August 2022.
+Added: HVF III Series 2022-5 Notes :
+Added: In March 2022, Hertz issued the Series 2022-5 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 364 million.
+Added: At the time of issuance, Hertz purchased the Class D Notes in an aggregate principal amount of $ 47 million.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Series 2022-1 Notes based on class.
−Removed: 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.
−Removed: HVF III Series 2022-2 Notes :
−Removed: In January 2022, Hertz issued the Series 2022-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $ 750 million.
−Removed: There is subordination within the Series 2022-2 Notes based on class.
−Removed: 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.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, all HVF II U.S.
−Removed: Vehicle Medium Term Notes and HVF II U.S Vehicle Variable Funding Notes were paid in full and terminated.
−Removed: 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.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the HVIF Series 2020-1 was paid in full and terminated.
+Added: There is subordination within each of the preceding series based on class.
+Added: HVF III Various Series 2022 Class D Notes:
+Added: At the time of the respective HVF III initial offerings disclosed above, Hertz purchased the Class D Notes.
+Added: Accordingly, the related principal amounts below are eliminated in consolidation as of December 31, 2022.
+Added: (In millions) Aggregate Principal Amount
+Added: HVF III Series 2022-2 Class D Notes 98
+Added: HVF III Series 2022-5 Class D Notes 47
Vehicle Debt-Other
−Removed: European Vehicle Notes
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were paid in full and terminated.
+Added: Repurchase Facility
+Added: In June 2022, Hertz entered the Repurchase Facility, whereby Hertz may sell the HVF III Series 2022 Class D Notes to the Repurchase Facility counterparty and repurchase such notes from time to time.
+Added: Transactions occurring under the Repurchase Facility are based on mutually agreeable terms and prevailing rates.
+Added: As of December 31, 2022, transactions totaling $ 86 million were outstanding under the Repurchase Facility and such transactions bear interest at a rate of SOFR plus 185 basis points and have a 30 -day tenor.
The European ABS is the primary vehicle financing facility for the Company's vehicle rental operations in France, the Netherlands, Germany and Spain.
4 unchanged sentences
The terms of the restructured European ABS provide for aggregate maximum borrowings of € 450 million and extend the maturity to April 2022.
−Removed: 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.
+Added: In December 2022, the European ABS was amended to (i) increase the aggregate maximum borrowings to € 1.1 billion, (ii) extend the maturity to November 2024, and (iii) incorporate the Italian fleet within the European ABS financing structure.
+Added: In connection with the amendment, the Hertz performance guarantee was amended to accommodate certain obligations of its Italian subsidiaries in their capacities as lessees, servicers and administrators under the amended European ABS.
Hertz Canadian Securitization
−Removed: 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.
−Removed: 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.
−Removed: As a result of the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.
+Added: In January 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A Notes which provide for aggregate maximum borrowings of CAD$ 350 million on a revolving basis, subject to availability under the borrowing base limitation.
+Added: In June 2022, the Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$ 450 million, for a seasonal commitment period through November 2022.
+Added: Following the expiration of the seasonal commitment period, aggregate maximum borrowings reverted to CAD$ 350 million.
+Added: Additionally, the Hertz
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Canadian Securitization was amended to extend the maturity of the aggregate maximum borrowings of CAD$ 350 million to June 2024.
+Added: In December 2022, Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$ 390 million, for a temporary commitment period through April 2023.
+Added: Following the expiration of the temporary commitment period, aggregate maximum borrowings will revert to CAD$ 350 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.
−Removed: 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.
−Removed: The terms of the amended Australian Securitization provide for aggregate maximum borrowings of AUD$ 210 million and extend the maturity to April 2022.
−Removed: 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.
+Added: In June 2021, the Australian Securitization was amended to provide for aggregate maximum borrowings of AUD$ 210 million and extended the maturity to April 2022.
In January 2022, the Australian Securitization was amended to increase the aggregate maximum borrowings to AUD$ 250 million and to extend the maturity to April 2024.
3 unchanged sentences
In May 2021, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to provide for aggregate maximum borrowings of NZD$ 60 million and to extend the maturity to June 2022.
−Removed: Financing Facility
−Removed: Events of default that would have arisen under the U.K.
−Removed: 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.
+Added: In April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to extend the maturity to June 2024.
+Added: In October 2022, Hertz New Zealand Holdings Limited amended its credit agreement to provide for aggregate maximum borrowings up to NZD$ 85 million, for a seasonal commitment period through March 2023.
+Added: Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to NZD$ 60 million.
Financing Facility
−Removed: The terms of the restructured U.K.
−Removed: Financing Facility provide for aggregate maximum borrowings of £ 100 million and extend the maturity to April 2022.
−Removed: In accordance with the Plan of Reorganization, guarantees provided by Hertz relating to the restructured U.K.
−Removed: Financing Facility, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.
+Added: In April 2021, a comprehensive restructuring of the U.K.
+Added: Financing Facility was executed to provide for aggregate maximum borrowings of £ 100 million and to extend the maturity to April 2022.
+Added: In April 2022, Hertz U.K.
+Added: Limited amended the U.K.
+Added: Financing Facility to provide for aggregate maximum borrowings of up to £ 120 million, for a seasonal commitment period through October 2022.
+Added: Following the expiration of the seasonal commitment period, aggregate maximum borrowings reverted to £ 100 million.
+Added: Additionally, the U.K.
+Added: Financing Facility was amended to extend the maturity of the aggregate maximum borrowings of £ 100 million to October 2023.
Toyota Financing Facility
2 unchanged sentences
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.
−Removed: Loss on Extinguishment of Debt
−Removed: The Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements.
−Removed: Loss on extinguishment of debt is presented in Reorganization items, net, unless otherwise noted in the table below, in the accompanying consolidated statements of operations.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: In March 2022, Hertz U.K.
+Added: Limited amended the U.K.
+Added: Toyota Financing Facility to increase aggregate maximum borrowings to £ 25 million and extended the maturity to October 2022.
+Added: In July 2022, Hertz U.K.
+Added: Limited amended the U.K.
+Added: Toyota Financing Facility to increase aggregate maximum borrowings from £ 25 million to £ 42 million and extended the maturity to June 2023.
+Added: Loss on Extinguishment of Debt
+Added: 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.
+Added: Loss on extinguishment of debt is presented in interest expense, net in the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2020.
+Added: For the year ended December 31, 2021, loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the table below, in the accompanying consolidated statements of operations.
+Added: There were no losses on extinguishment of debt recognized for the year ended December 31, 2022.
The following table reflects the amount of loss for each respective redemption/termination:
13 unchanged sentences
Letter of Credit Facility 8 —
−Removed: 5.875 % Senior Notes due 2020 (2)
−Removed: 7.375 % Senior Notes due 2021 (2)
Total Non-Vehicle Debt (subject to compromise) 88 —
6 unchanged sentences
Total Loss on Extinguishment of Debt $ 199 $ 5
+Added: (1) On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court and the Company emerged from Chapter 11.
+Added: In accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S.
+Added: ABS Program and the HVIF U.S.
+Added: ABS Program were repaid in full and cancelled.
(2) 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.
−Removed: (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.
−Removed: (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.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2022, the nominal amounts of maturities of debt for each of the years ending December 31 are as follows:
4 unchanged sentences
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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Borrowing Capacity and Availability
14 unchanged sentences
Hertz Canadian Securitization 4 —
−Removed: Australian Securitization 24 —
Financing Facility 19 —
Toyota Financing Facility 2 —
−Removed: New Zealand RCF 2 —
Total Vehicle Debt 1,739 —
Total $ 3,253 $ 1,514
−Removed: Letters of Credit
−Removed: 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.
−Removed: 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.
−Removed: For the remainder, the Company provided cash collateral to backstop these obligations.
−Removed: 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.
−Removed: As of December 31, 2021, there remains no capacity to issue additional letters of credit under the Term C Loan.
−Removed: Such letters of credit have been issued primarily to support the Company's insurance programs, vehicle rental
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: concessions and leaseholds as well as to provide credit enhancement for its asset-backed securitization facilities.
+Added: Letters of Credit
+Added: As of December 31, 2022, there were outstanding standby letters of credit totaling $ 691 million comprised primarily of $ 431 million issued under the First Lien RCF and $ 245 million issued under the Term C Loan.
+Added: As of December 31, 2022, no capacity remains to issue additional letters of credit under the Term C Loan.
+Added: Such letters of credit have been issued primarily to support the Company's insurance programs and to provide credit enhancement for the Company's asset-backed securitization facilities, as well as to support the Company's vehicle rental concessions and leaseholds.
As of December 31, 2022, none of the issued letters of credit have been drawn upon.
3 unchanged sentences
The Company has a 25 % ownership interest in IFF No.
−Removed: 2, whose sole purpose is to provide commitments to lend in various currencies subject to borrowing bases comprised of revenue earning vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries.
+Added: 2, whose sole purpose is to provide commitments to lend under the European ABS in various currencies subject to borrowing bases comprised of revenue earning vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries.
2 is a VIE and the Company is the primary beneficiary, therefore, the assets, liabilities and results of operations of IFF No.
1 unchanged sentence
As of December 31, 2022 and 2021, IFF No.
−Removed: 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.
+Added: 2 had total assets of $ 1.3 billion and $ 734 million, respectively, comprised primarily of intercompany receivables, and total liabilities of $ 1.3 billion and $ 733 million, respectively, comprised primarily of debt.
Covenant Compliance
−Removed: 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:
+Added: The First Lien Credit Agreement requires Hertz to comply with the following financial covenant:
a First Lien Ratio of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year.
−Removed: The financial covenant disclosed above was effective beginning in the third quarter of 2021.
+Added: This financial covenant was effective beginning in the third quarter of 2021.
As of December 31, 2022, Hertz was in compliance with the First Lien Ratio.
−Removed: 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.
−Removed: The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments.
+Added: In addition to the financial covenant, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries.
+Added: The First Lien Credit Agreement also contains customary negative covenants, including, among other things, restrictions on the incurrence of liens, indebtedness, asset dispositions and restricted payments.
As of December 31, 2022, the Company was in compliance with all covenants in the First Lien Credit Agreement.
1 unchanged sentence
As of December 31, 2022 and 2021, accrued interest was $ 19 million and $ 12 million, respectively, which is included in accrued liabilities in the accompanying consolidated balance sheets.
−Removed: There was $ 70 million of accrued interest included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020 related to the filing of the Chapter 11 Cases as disclosed above.
Restricted Net Assets
As a result of the contractual restrictions on Hertz and certain of its subsidiaries' ability to pay dividends (directly or indirectly) under various terms of its debt, as of December 31, 2022, the restricted net assets of the subsidiaries of Hertz and Hertz Global exceed 25 % of their total consolidated net assets, respectively.
−Removed: Note 7— Employee Retirement Benefits
−Removed: The Company sponsors multiple domestic and international employee retirement benefit plans where benefits are based upon years of service and compensation.
−Removed: The Hertz Corporation Account Balance Defined Benefit Pension Plan (the “Hertz Retirement Plan”) is a U.S.
−Removed: cash balance plan, which was amended in 2014 to permanently
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: discontinue future benefit accruals and participation under the plan for non-union employees.
+Added: Note 7— Employee Retirement Benefits
+Added: The Company sponsors multiple domestic and international employee retirement benefit plans where benefits are based upon years of service and compensation.
+Added: The Hertz Corporation Account Balance Defined Benefit Pension Plan (the “Hertz Retirement Plan”) is a U.S.
+Added: cash balance plan, which was amended in 2014 to permanently 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.
5 unchanged sentences
employees, where contributions are matched based on specific guidelines in the plans.
−Removed: 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.
+Added: Additionally, the Company sponsors postretirement health care and life insurance benefits for a limited number of employees with hire dates prior to January 1, 1990.
Management makes certain assumptions relating to discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates and other factors when determining amounts to be recognized.
6 unchanged sentences
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.
−Removed: 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").
−Removed: The Supplemental Plans were rejected in the Company's Chapter 11 Cases and terminated in connection with the Plan of Reorganization.
−Removed: As a result, participants in the Supplemental Plans were no longer entitled to benefit payments and were considered general creditors of the Company.
−Removed: As of December 31, 2020, the Company classified $ 24 million of its U.S.
−Removed: pension benefit obligation as liabilities subject to compromise in its accompanying consolidated balance sheet which were paid through the claim settlement process in 2021.
HERTZ GLOBAL HOLDINGS, INC.
11 unchanged sentences
Interest cost 16 12 5 4 — 1
−Removed: Plan curtailments — ( 2 ) — — — —
Plan settlements ( 24 ) ( 26 ) ( 5 ) ( 6 ) ( 1 ) —
3 unchanged sentences
Benefit obligation as of December 31 $ 371 $ 465 $ 172 $ 307 $ 8 $ 12
−Removed: $ 465 $ 522 $ 307 $ 340 $ 12 $ 12
Change in Plan Assets
8 unchanged sentences
Funded Status of the Plan
−Removed: Plan assets less than benefit obligation $ 3 $ ( 34 ) $ ( 52 ) $ ( 82 ) $ ( 12 ) $ ( 12 )
−Removed: (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.
−Removed: As such, the Company classified $ 24 million of its U.S.
−Removed: pension benefit obligation as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.
+Added: Plan assets (less than) in excess of the benefit obligation $ ( 33 ) $ 3 $ ( 41 ) $ ( 52 ) $ ( 8 ) $ ( 12 )
In 2022, discount rates increased, resulting in actuarial gains for the U.S.
+Added: pension and postretirement plans, partially offset by census data updates and experience.
+Added: In 2021, discount rates increased, resulting in actuarial gains for the U.S.
pension and postretirement plans.
1 unchanged sentence
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.
−Removed: In 2020, discount rates decreased, resulting in actuarial losses for the U.S.
−Removed: pension and postretirement plans.
−Removed: In addition, an increase in the inflation assumption in 2020 resulted in an actuarial loss in the Non-U.S.
−Removed: pension plan.
HERTZ GLOBAL HOLDINGS, INC.
8 unchanged sentences
Accrued liabilities ( 33 ) — ( 53 ) ( 82 ) ( 8 ) ( 12 )
−Removed: Net obligation recognized in the balance sheets
−Removed: $ 3 $ ( 34 ) $ ( 52 ) $ ( 82 ) $ ( 12 ) $ ( 12 )
+Added: Net asset (obligation) recognized in the balance sheets $ ( 33 ) $ 3 $ ( 41 ) $ ( 52 ) $ ( 8 ) $ ( 12 )
Prior service credit
11 unchanged sentences
$ 35 $ ( 14 ) $ ( 15 ) $ ( 20 ) $ ( 2 ) $ ( 1 )
−Removed: Accumulated Benefit Obligation as of December 31 (1)
−Removed: $ 465 $ 522 $ 306 $ 338 N/A N/A
+Added: Accumulated Benefit Obligation as of December 31 $ 371 $ 465 $ 171 $ 306 N/A N/A
Weighted-average assumptions as of December 31
7 unchanged sentences
N/A - Not applicable
−Removed: (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.
−Removed: As such, the Company classified $ 24 million of its U.S.
−Removed: pension benefit obligation as liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.
The discount rate used to determine the December 31, 2022 and 2021 benefit obligations for U.S.
84 unchanged sentences
The protection portfolio is designed to partially hedge the interest rate and inflation expectation exposure of the liabilities which are measured on a local regulatory basis.
−Removed: The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the
+Added: The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the value of the liabilities
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: value of the liabilities change and the allocations within the protection portfolio will be allowed to vary accordingly.
+Added: change and the allocations within the protection portfolio will be allowed to vary accordingly.
All of the invested assets of the U.K.
17 unchanged sentences
Passive Equity Funds:
−Removed: — 12 — — 12 —
Overseas Equities (2)
−Removed: — 14 — — 14 —
Passive Bond Funds:
15 unchanged sentences
qualified pension plan.
−Removed: In 2021 and 2020, the Company made contributions to its U.S.
−Removed: non-qualified pension plans of $ 24 million and $ 2 million, respectively.
−Removed: The Company made discretionary contributions of $ 3 million to its U.K.
−Removed: Plan during each of the years ended December 31, 2021 and 2020.
+Added: In 2022, the Company made no contributions to its U.S.
+Added: non-qualified pension plans.
+Added: In 2021, the Company made $ 24 million of contributions to its U.S.
+Added: non-qualified pension plans.
+Added: In 2022, the Company made no discretionary contributions to its U.K.
+Added: In 2021, the Company made discretionary contributions of $ 3 million to its U.K.
The Company does no t anticipate contributing to the U.S.
qualified pension plan during 2023.
−Removed: The Company does not anticipate contributing any significant amounts to the U.K.
−Removed: Plan and anticipates contributing $ 2 million to its other international plans during 2022.
+Added: The Company anticipates contributing approximately $ 1 million to the U.K.
+Added: Plan and approximately $ 2 million to its other international plans during 2023.
The level of 2023 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.
16 unchanged sentences
The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.
−Removed: Amounts accrued for benefit payments under the Company's multiemployer pension plans of $ 20 million represent the net present value of the projected liabilities from withdrawal claims as of December 31, 2021.
+Added: Amounts accrued for benefit payments under the Company's multiemployer pension plans of $ 20 million represent the net present value of projected liabilities as of December 31, 2022.
The Company's participation in multiemployer plans is outlined in the table below.
22 unchanged sentences
2021 Omnibus Incentive Plan
−Removed: During the fourth quarter of 2021, Hertz Global's Board approved the Hertz Global Holdings, Inc.
+Added: During 2021, Hertz Global's Board approved the Hertz Global Holdings, Inc.
2021 Omnibus Incentive Plan (the “2021 Omnibus Plan").
−Removed: 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.
−Removed: 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.
+Added: The Company initially authorized 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.
1 unchanged sentence
As of December 31, 2022, 41,866,495 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan.
−Removed: 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.
+Added: A summary of the total compensation expense and related income tax benefits recognized for grants made under the 2021 Omnibus Plan is as follows:
+Added: Years Ended December 31,
+Added: (In millions) 2022 2021
+Added: Compensation expense $ 129 $ 7
+Added: Income tax benefit ( 7 ) ( 2 )
+Added: Total $ 122 $ 5
As of December 31, 2022, there was $ 214 million of total unrecognized compensation cost expected to be recognized over the remaining 2.2 years, on a weighted average basis, of the requisite service period that began on the grant dates.
7 unchanged sentences
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.
−Removed: The Company accounts for stock options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period.
−Removed: 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.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The Company accounts for stock options as equity-classified awards and recognizes compensation cost on a straight-line basis over the vesting period.
+Added: 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.
The Company calculates the expected volatility based on the historical movement of its stock price.
22 unchanged sentences
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.
−Removed: As of December 31, 2021, there were no issued or outstanding grants of PSAs, PSUs or PUs under the 2021 Omnibus Plan.
−Removed: Restricted Stock and Restricted Stock Units
−Removed: 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.
−Removed: Restricted stock and RSUs are subject to forfeiture until vested.
−Removed: Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period.
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: A summary of RSU activity as of and for the year ended December 31, 2021 under the 2021 Omnibus Plan is presented below:
+Added: A summary of the PSU activity as of December 31, 2022 under the 2021 Omnibus Plan is presented below:
Shares Weighted-
2 unchanged sentences
Outstanding as of January 1, 2022 — $ — $ —
−Removed: Granted 1,727,406 26.17 —
+Added: 10,005,537 17.72 —
+Added: Vested ( 560,518 ) 18.56 —
Forfeited or Expired ( 152,270 ) 21.08 —
Outstanding as of December 31, 2022 9,292,749 17.62 143
−Removed: Additional information pertaining to RSU activity under the 2021 Omnibus Plan was as follows:
−Removed: Years Ended December 31,
−Removed: Total fair value of awards that vested (in millions) $ —
−Removed: Weighted-average grant-date fair value of awards 26.17
−Removed: Deferred Stock Units
−Removed: Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date.
−Removed: During the year ended December 31, 2021, there were approximately 24,000 outstanding shares of deferred stock units under the 2021 Omnibus Plan.
−Removed: 2016 Omnibus Incentive Plan
−Removed: 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.
−Removed: 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.
−Removed: See Note 21, "Reorganization Items, Net."
−Removed: 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.
−Removed: 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:
−Removed: Years Ended December 31,
−Removed: (In millions) 2021 2020 2019
−Removed: Compensation expense (credit) $ 3 $ ( 2 ) $ 18
−Removed: Income tax provision (benefit) ( 1 ) — ( 2 )
−Removed: Total $ 2 $ ( 2 ) $ 16
−Removed: 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.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Stock Options and SARs
−Removed: 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.
−Removed: 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.
−Removed: No stock options or SARs were exercisable after a maximum of ten years from the grant date.
−Removed: The Company accounted for stock options as equity-classified awards and recognized compensation cost on a straight-line basis over the vesting period.
−Removed: 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.
−Removed: The Company calculated the expected volatility based on the historical movement of its stock price.
−Removed: Assumption 2021 (1)
+Added: (1) Presented assuming the issuance at the original target award amount (100%).
+Added: Compensation expense for PSUs is based on the grant date fair value.
+Added: For grants issued in 2022, vesting eligibility is based on market, performance and service conditions of one to five years .
+Added: Accordingly, the number of shares issued at the end of the performance period could range between 0 % and 200 % of the original target award amount (100%) disclosed in the table above.
+Added: Certain of these PSUs were valued on the grant date using a Monte Carlo simulation model that incorporates the assumptions noted in the following table:
Expected volatility 68 %
3 unchanged sentences
Weighted-average grant date fair value $ 17.61
−Removed: (1) There were no options approved to be granted by the Compensation Committee in 2021 or 2020.
−Removed: (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."
−Removed: A summary of stock option activity under the 2016 Omnibus Plan as of December 31, 2021 is presented below:
−Removed: Options Shares Weighted
−Removed: Price Weighted-
−Removed: Term (years) Aggregate Intrinsic
−Removed: Value (In millions)
−Removed: Outstanding as of January 1, 2021 99,038 $ 34.76 2.3 $ —
−Removed: Granted — — — —
−Removed: Exercised — — — —
−Removed: Forfeited or Expired (1)
−Removed: ( 99,038 ) 34.76 — —
−Removed: Outstanding as of December 31, 2021 — — — —
−Removed: Exercisable as of December 31, 2021 — — — —
−Removed: (1) Includes all remaining outstanding stock options that were deemed to be cancelled on the Effective Date.
−Removed: A summary of non-vested stock option activity under the 2016 Omnibus Plan as of December 31, 2021 is presented below:
−Removed: Shares Weighted-
−Removed: Exercise Price Weighted-Average
−Removed: Grant-Date Fair
−Removed: Non-vested as of January 1, 2021 23,249 $ 18.07 $ 9.06
−Removed: Granted — — —
−Removed: Forfeited or expired (1)
−Removed: ( 23,249 ) 18.07 9.06
−Removed: Non-vested as of December 31, 2021 — — —
−Removed: (1) Includes all outstanding non-vested stock options that were deemed to be cancelled on the Effective Date.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Additional information pertaining to stock option activity under the 2016 Omnibus Plan is as follows:
−Removed: Years Ended December 31,
−Removed: (In millions) 2021 2020 2019
−Removed: Aggregate intrinsic value of stock options exercised $ — $ — $ —
−Removed: Cash received from the exercise of stock options — — —
−Removed: Fair value of options that vested — — 5
−Removed: Tax benefit realized on exercise of stock options — — —
−Removed: Performance Stock Awards, Performance Stock Units, Restricted Stock and Restricted Stock Units
−Removed: 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.
−Removed: 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.
−Removed: A summary of the PSU and PSA activity as of December 31, 2021 under the 2016 Omnibus Plan is presented below:
−Removed: Shares Weighted-
−Removed: Fair Value Aggregate Intrinsic
−Removed: Value (In millions)
−Removed: Outstanding as of January 1, 2021 1,813,305 $ 16.47 $ 2
−Removed: Granted — — —
−Removed: Forfeited or Expired (1)
−Removed: ( 1,813,305 ) 16.47 —
−Removed: Outstanding as of December 31, 2021 — — —
−Removed: (1) Included all outstanding PSUs and PSAs under the 2016 Omnibus Plan that were deemed to be cancelled on the Effective Date.
+Added: As of December 31, 2022, there were no issued or outstanding grants of PSAs or PUs under the 2021 Omnibus Plan.
+Added: Restricted Stock and Restricted Stock Units
+Added: Restricted stock and RSUs granted under the 2021 Omnibus Plan vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee.
+Added: Restricted stock and RSUs are subject to forfeiture until vested.
+Added: Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period.
+Added: RSU grants issued in 2022 vest over a period of two to four years .
+Added: For grants issued in 2021, the vesting period is three years except for 500,000 shares that vested in the first half of 2022.
A summary of RSU activity as of and for the year ended December 31, 2022 under the 2021 Omnibus Plan is presented below:
4 unchanged sentences
Granted 4,040,059 19.94 —
+Added: Vested ( 2,121,074 ) 23.08 —
Forfeited or Expired ( 232,508 ) 24.53 —
−Removed: ( 782,056 ) 15.11 —
Outstanding as of December 31, 2022 3,412,763 20.82 53
−Removed: (1) Included all outstanding RSUs under the 2016 Omnibus Plan that were deemed to be cancelled on the Effective Date.
−Removed: Additional information pertaining to RSU activity under the 2016 Omnibus Plan is as follows:
+Added: Additional information pertaining to RSU activity under the 2021 Omnibus Plan was as follows:
Years Ended December 31,
−Removed: 2021 2020 2019
Total fair value of awards that vested (in millions) $ 49 $ —
−Removed: Weighted-average grant date fair value of awards — 12.18 18.66
+Added: Weighted-average grant-date fair value of awards granted $ 19.94 $ 26.17
+Added: Deferred Stock Units
+Added: Each deferred stock unit granted under the 2021 Omnibus Plan represents a contractual right to receive a stated number of shares of common stock of the Company or if provided by the Compensation Committee in accordance with the 2021 Omnibus Plan on or after the grant date, cash equal to the fair value of such shares of common stock or any combination of shares of common stock and cash having an aggregate fair market value equal to such stated number of shares of common stock, on a specified future date.
+Added: As of December 31, 2022 and 2021, there were
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: approximately 68,000 and 24,000 outstanding shares, respectively, of deferred stock units under the 2021 Omnibus Plan.
Note 9— Leases
−Removed: The Company adopted Topic 842 in accordance with the effective date on January 1, 2019.
−Removed: 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.
7 unchanged sentences
Leases that do not meet any of the above criteria are accounted for as operating leases.
−Removed: The Company combines lease and non-lease components in its contracts under Topic 842, when permissible.
+Added: The Company combines lease and non-lease components in its contracts under ASC 842, Lease Accounting ("Topic 842"), when permissible.
The following further describes the Company's leasing transactions.
3 unchanged sentences
The Company also offers value-added services in connection with the vehicle rental, which are deemed non-lease components, such as loss or collision damage waiver, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and satellite radio.
−Removed: Additionally, the Company charges for variable services primarily consisting of tolls and refueling charges incurred during the rental period, and for fees associated with the early or late termination of the vehicle lease.
+Added: Additionally, the Company charges for variable services primarily consisting of tolls, refueling and recharging during the rental period, and for fees associated with the early or late termination of the vehicle lease.
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.
−Removed: 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.
−Removed: These leases contained terminal rental adjustment clauses which were considered variable charges.
HERTZ GLOBAL HOLDINGS, INC.
25 unchanged sentences
To determine the present value of its lease payments, the Company utilizes the interest rate implicit in the lease agreement.
−Removed: 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.
−Removed: 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 represented amounts previously due in 2020.
−Removed: The Company elected to apply the accounting relief provided by the FASB and elected to not evaluate whether the concession was a modification.
−Removed: The Company accounted for the concession as if it was part of the existing contract.
−Removed: 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.
+Added: If the implicit interest rate cannot be determined in the lease agreement, the Company utilizes the Company's collateralized incremental borrowing rate as of January 1, 2019, the adoption date of Topic 842, or the commencement date of the lease, whichever is later.
HERTZ GLOBAL HOLDINGS, INC.
23 unchanged sentences
Europe Restructuring
−Removed: 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.
+Added: Due to the impact from COVID-19 and reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment.
The total number of employees affected for the year ended December 31, 2021 was approximately 900 .
−Removed: The program is expected to be completed in 2022.
+Added: The program was substantially completed in 2021.
Restructuring
−Removed: 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.
+Added: Due to the impact from COVID-19, 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.
21 unchanged sentences
International RAC segment 32 —
−Removed: Corporate operations — 3
+Added: Corporate — 3
Total $ 32 $ 37
The tables above do not include pension-related settlement charges incurred during the year ended December 31, 2020.
−Removed: See Note 7, "Employee Retirement Benefits."
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
+Added: The following table summarizes the activity affecting the restructuring accrual, which is recorded in accrued liabilities in the accompanying consolidated balance sheet.
(In millions) Termination
Benefits Other Total
−Removed: Balance as of December 31, 2019 $ 1 $ — $ 1
−Removed: Charges incurred 37 — 37
−Removed: Cash payments ( 29 ) — ( 29 )
−Removed: Classified to liabilities subject to compromise (1)
−Removed: ( 7 ) — ( 7 )
−Removed: Other ( 2 ) — ( 2 )
−Removed: Balance as of December 31, 2020 — — —
+Added: Balance as of January 1, 2021 $ — $ — $ —
Charges incurred 27 5 32
3 unchanged sentences
Balance as of December 31, 2021 $ 2 $ 2 $ 4
−Removed: (1) As a result of filing the Chapter 11 Cases, the Company classified $ 7 million of restructuring charges to liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.
+Added: (1) As a result of filing the Chapter 11 Cases, the Company classified $ 7 million of restructuring charges to liabilities subject to compromise during 2020.
On the Effective Date, in connection with the Plan of Reorganization, the Company reclassified $ 7 million of accrued and unpaid restructuring charges from liabilities subject to compromise.
−Removed: See Note 20, "Liabilities Subject to Compromise."
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11— Income Tax (Provision) Benefit
10 unchanged sentences
Total income (loss) before income taxes $ 1,745 $ 1,474 $ ( 2,183 )
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The total income tax provision (benefit) consists of the following:
13 unchanged sentences
Total provision (benefit) - Hertz $ 390 $ 318 $ ( 328 )
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The principal items of the U.S.
8 unchanged sentences
Federal and state tax credit carry forwards 81 64
+Added: Deferred interest expense 70 10
Accrued and prepaid expenses 147 185
2 unchanged sentences
valuation allowance ( 511 ) ( 690 )
−Removed: ( 690 ) ( 651 )
Total net deferred tax assets 2,166 1,461
1 unchanged sentence
Depreciation on tangible assets ( 2,297 ) ( 1,342 )
−Removed: ( 1,342 ) ( 380 )
Intangible assets ( 714 ) ( 711 )
−Removed: ( 711 ) ( 723 )
Operating lease right-of-use assets ( 456 ) ( 408 )
−Removed: ( 408 ) ( 406 )
Total deferred tax liabilities ( 3,467 ) ( 2,461 )
−Removed: ( 2,461 ) ( 1,509 )
Net deferred tax liability - Hertz Global ( 1,301 ) ( 1,000 )
−Removed: ( 1,000 ) ( 719 )
Deferred tax asset - net operating loss applicable to Hertz Holdings ( 3 ) ( 3 )
Net deferred tax liability - Hertz $ ( 1,304 ) $ ( 1,003 )
−Removed: $ ( 1,003 ) $ ( 724 )
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Hertz Global and Hertz
1 unchanged sentence
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.
−Removed: As of December 31, 2021, the Company has U.S.
−Removed: federal net operating loss carryforwards ("Federal NOLs") of approximately $ 4.0 billion, $ 839 million tax effected and federal tax credits of approximately $ 28 million.
−Removed: Federal NOLs have an indefinite carryforward period, which may offset 80% of taxable income generated in any future year.
−Removed: The federal tax credits begin expiring in 2035.
−Removed: The Company has not recorded a valuation allowance on its Federal NOLs or federal tax credits as there were adequate U.S.
+Added: As of December 31, 2022, the Company has approximately $ 1.3 billion of tax-effected U.S.
+Added: federal net operating loss carryforwards ("Federal NOLs"), which have an indefinite carryforward period and may offset 80% of taxable income generate in any future year.
+Added: The Company has approximately $ 45 million of federal tax credits which begin expiring in 2025.
+Added: The Company has approximately $ 50 million of tax-effected federal deferred interest expense which has an indefinite carryforward period.
+Added: The Company has not recorded a valuation allowance on its Federal NOLs, federal credits, or deferred interest expense as there were adequate U.S.
deferred tax liabilities that could be realized within the carry forward periods.
−Removed: 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.
−Removed: Separately, the company generated approximately $ 600 million of taxable capital gains on the disposition of the Donlen Corporation.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The state tax credits expire over various years beginning in 2022 depending upon when they were generated and the particular jurisdiction.
−Removed: 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.
−Removed: The tax effected Foreign NOLs are recorded as a deferred tax asset of $ 239 million, and are offset by valuation allowances totaling $ 239 million.
−Removed: In addition, as of December 31, 2021, the Company has no tax credits in foreign jurisdictions.
−Removed: 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.
−Removed: Estimates of these limitations have been reflected in the tax provision.
+Added: As of December 31, 2022, the Company has approximately $ 164 million of tax-effected U.S.
+Added: federal capital loss carryforwards of which a valuation allowance of approximately $ 162 million has been recorded.
+Added: As of December 31, 2022, the Company has approximately $ 194 million of tax-effected state net operating loss carryforwards.
+Added: Some of these net operating losses have an indefinite carryforward period, and those that do not will begin to expire in 2023 if not utilized.
+Added: These net operating losses are offset, in part, by a valuation allowance totaling $ 63 million.
+Added: The Company has approximately $ 37 million in state tax credits for which a full valuation allowance is recorded.
+Added: The state tax credits expire over various years beginning in 2023 depending upon the period when they
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: were generated and the particular jurisdiction.
+Added: The Company has approximately $ 19 million of tax-effected deferred interest expense which has an indefinite carryforward period.
+Added: The Company has approximately $ 27 million of tax effected state capital losses that are fully offset by a valuation allowance.
+Added: The tax effected amounts for all state tax attributes are net of federal benefit.
+Added: As of December 31, 2022, the Company has approximately $ 243 million of tax-effected foreign net operating loss carry forwards.
+Added: Some of the net operating losses have an indefinite carryforward period, and those that do not will begin to expire in 2031 if not utilized.
+Added: These net operating losses are offset, in part, by a valuation allowance totaling $ 187 million.
+Added: The Company has no tax credits in foreign jurisdictions.
+Added: The Company has approximately $ 2 million of tax-effected foreign deferred interest which has an indefinite carryforward period.
+Added: The Company has approximately $ 3 million of tax-effected foreign capital loss carryforwards which a full valuation allowance has been recorded.
+Added: The Company recorded a valuation allowance against most of our deferred tax assets for several European operations as of both December 31, 2022, and December 31, 2021.
+Added: We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.
+Added: However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a portion of the valuation allowance will no longer be needed.
+Added: Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.
+Added: However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.
+Added: Due to the ownership changes before and upon emergence from Chapter 11, the utilization of the Company's Federal, State and Foreign NOLs may be subject to limitations.
+Added: Estimates of these limitations have been reflected in the tax provision.
The significant items in the reconciliation of the statutory and effective income tax rates consists of the following items in the table below.
6 unchanged sentences
Change in state rates, net of federal effect — 2 1
−Removed: Foreign tax rate differential — — ( 31 )
Change in foreign statutory rates — ( 2 ) —
8 unchanged sentences
tax on foreign earnings 1 2 —
−Removed: Stock option shortfalls — — 7
Effective tax rate - Hertz Global 16 47 16
1 unchanged sentence
Effective tax rate - Hertz 22 % 22 % 15 %
−Removed: The Company recorded a tax provision in 2021 compared to a tax benefit in 2020.
−Removed: The change was primarily driven by improvements in the Company's financial performance in 2021, changes in the mix of earnings and losses in jurisdictions for which no tax benefit can be recognized, non-deductible bankruptcy expenses, and reduced by the tax benefits of the European reorganization.
−Removed: Hertz Holdings exclusive items are comprised of transactions specific to Hertz Holdings only.
−Removed: The Company recorded a tax benefit in 2020 compared to a tax provision in 2019.
−Removed: 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.
−Removed: 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.
−Removed: However, considering correlative adjustments associated
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: with some uncertain tax positions, the net impact on the income tax provision would be approximately $ 9 million if settled.
+Added: The change in tax provision in 2022 compared to 2021 is driven by improvements in financial performance in 2022, as well as the non-taxable change in fair value of Public Warrants, the tax benefits associated with the restructuring in Europe recognized in 2021, the impact of changes to state and foreign valuation allowances, and non-deductible bankruptcy costs incurred in 2021.
+Added: Hertz Holdings exclusive items are comprised of transactions specific to Hertz Holdings only.
+Added: The Company recorded a tax provision in 2021 compared to a tax benefit in 2020.
+Added: The change was primarily driven by improvements in the Company's financial performance in 2021, changes in the mix of earnings and losses in jurisdictions for which no tax benefit can be recognized, non-deductible bankruptcy expenses, and reduced by the tax benefits of the European reorganization.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
7 unchanged sentences
Balance as of December 31 $ 298 $ 106 $ 53
+Added: The total amount of unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate is $ 200 million.
+Added: 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, 2022, 2021 and 2020.
+Added: 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 $ 7 million as of December 31, 2022 and 2021, respectively.
+Added: During 2021 as part of a restructuring of European operations, we generated a tax loss of approximately $ 1.3 billion, which was characterized as a capital loss in the 2021 provision.
+Added: The Company is in the process of obtaining a pre-filing agreement with the Internal Revenue Services to determine whether the capital loss qualifies as an ordinary loss.
+Added: It is reasonably possible that the total amounts of unrecognized tax benefits will significantly decrease by approximately $ 190 million within 12 months of our reporting date if the IRS confirms that the loss we generated is ordinary in nature.
The Company is subject to examination by taxing authorities throughout the world.
The tax years that are open for examination span from 2010 to 2022.
+Added: Additionally, the Company is under audit in several U.S.
+Added: states and other foreign jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances.
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.
−Removed: In the second quarter of 2021, the IRS concluded its audit of the Company's 2016 tax year which resulted in no audit adjustments.
−Removed: During June 2021, the Company received final resolution to its request for competent authority relief concerning a German and U.S.
−Removed: transfer pricing matter covering the 2005 - 2010 tax years.
−Removed: 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.
−Removed: Additionally, the Company is under audit in several U.S.
−Removed: states and other foreign jurisdictions, and it is reasonably possible that the amount of unrecognized tax benefits may change as the result of the completion of ongoing examinations, the expiration of the statute of limitations or other unforeseen circumstances.
−Removed: The amount that is reasonably possible to change during the next twelve months is not expected to be significant.
−Removed: 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.
−Removed: 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.
−Removed: Beginning the first quarter of 2020, Hertz Global no longer asserts permanent reinvestment of foreign earnings with respect to its non-U.S.
−Removed: earnings, due to the impact from COVID-19 as disclosed in Note 1, "Background."
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The Company has provided for deferred taxes on undistributed earnings of foreign subsidiaries.
+Added: However, it is not practicable to estimate the deferred taxes on other differences on investments in foreign subsidiaries.
+Added: Note 12— Financial Instruments
+Added: The Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates.
+Added: Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements.
+Added: The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective.
+Added: Additionally, upon the occurrence of an event of default under the Company’s International Swaps and Derivatives Association ("ISDA") master derivative agreements, the non-defaulting party generally has the right, but not the obligation, to set-off any early termination amounts under any such agreements against any other amounts owed with regard to any other agreements between the parties to each such agreement.
+Added: None of the Company's financial instruments have been designated as hedging instruments as of December 31, 2022 and 2021.
+Added: Interest Rate Risk
+Added: The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.
+Added: Currency Exchange Rate Risk
+Added: The Company uses foreign currency exchange rate derivative financial instruments to manage its currency exposure resulting from intercompany transactions and other cross currency obligations.
+Added: The following table summarizes the estimated fair value of financial instruments:
+Added: Fair Value of Financial Instruments
+Added: Asset Derivatives (1)
+Added: Liability Derivatives (1)
+Added: December 31, December 31,
+Added: (In millions) 2022 2021 2022 2021
+Added: Interest rate instruments $ 140 $ 12 $ — $ —
+Added: Foreign currency forward contracts 1 1 2 2
+Added: $ 141 $ 13 $ 2 $ 2
+Added: (1) All asset derivatives are recorded in prepaid expenses and other assets and all liability derivatives are recorded in accrued liabilities in the accompanying consolidated balance sheets.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: The following table summarizes the gains or (losses) on financial instruments for the period indicated:
+Added: Location of Gain (Loss) Recognized on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives
+Added: Years Ended December 31,
+Added: (In millions) 2022 2021 2020
+Added: Interest rate instruments Vehicle interest expense, net (1)(2)
+Added: $ 127 $ 3 $ 12
+Added: Foreign currency forward contracts Other (income) expense, net (2)
+Added: ( 2 ) 2 ( 3 )
+Added: $ 125 $ 5 $ 9
+Added: (1) In 2021, $ 6 million of gains on interest rate instruments were recorded in other (income) expense, net, offset by $ 3 million of losses on interest rate instruments which were recorded in selling, general and administrative expense.
+Added: (2) In 2020, all gains (losses) on financial instruments were recorded in selling, general and administrative expense.
+Added: The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with their counterparties.
+Added: The Company does not offset such derivative assets and liabilities in its consolidated balance sheets, and the potential effect of the Company’s use of the master netting arrangements is not material.
Note 13— Fair Value Measurements
3 unchanged sentences
GAAP requires certain financial and non-financial assets and liabilities of the Company to be measured on either a recurring basis or on a nonrecurring basis.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Fair Value Disclosures
1 unchanged sentence
Debt Obligations
−Removed: 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.
−Removed: Level 2 inputs).
+Added: 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, 2022 December 31, 2021
1 unchanged sentence
Non-Vehicle Debt $ 3,035 $ 2,685 $ 3,055 $ 3,065
−Removed: $ 3,055 $ 3,065 $ 4,747 $ 3,382
Vehicle Debt 10,948 10,304 7,954 7,908
Total $ 13,983 $ 12,989 $ 11,009 $ 10,973
−Removed: (1) Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying consolidated balance sheet as of December 31, 2020.
−Removed: See Note 6, "Debt."
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
6 unchanged sentences
The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts.
−Removed: The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e.
−Removed: Level 1 inputs).
+Added: 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
−Removed: 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").
+Added: Hertz Global's Public Warrants are classified as liabilities and recorded at fair value in the accompanying consolidated balance sheets as of December 31, 2022 and 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ("Topic 480").
See Note 19, "Public Warrants - Hertz Global," for further details.
1 unchanged sentence
The Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy.
−Removed: For the 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.
+Added: For the years ended December 31, 2022 and 2021, the fair value adjustments resulted in a gain of $ 704 million and a loss of $ 627 million, respectively, and were recorded in change in fair value of Public Warrants in the accompanying consolidated statements of operations for Hertz Global for the years ended December 31, 2022 and 2021.
+Added: Financial Instruments
+Added: The fair value of the Company's financial instruments as of December 31, 2022 and 2021 are disclosed in Note 12, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
−Removed: Donlen Assets
−Removed: 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.
−Removed: The Company completed the Donlen Sale on March 30, 2021.
−Removed: See Note 3, "Divestitures," for additional information.
Note 14— Accumulated Other Comprehensive Income (Loss)
20 unchanged sentences
As of December 31, 2022 and 2021, the Company's liability recorded for self-insured liabilities was $ 472 million and $ 463 million, respectively.
−Removed: The Company believes that its analysis is based on the most relevant information available, combined with reasonable
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: 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.
2 unchanged sentences
Loss Contingencies
−Removed: 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, former employees and governmental investigations.
−Removed: 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.
−Removed: In re Hertz Global Holdings, Inc.
−Removed: Securities Litigation - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr.
−Removed: Hertz Global Holdings, Inc., et al., was commenced in the U.S.
−Removed: District Court for the District of New Jersey naming Old Hertz Holdings and certain of its officers as defendants and alleging violations of the federal securities laws.
−Removed: The complaint alleged that Old Hertz Holdings made material misrepresentations and/or omissions of material fact in certain of its public disclosures in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder.
−Removed: The complaint sought an unspecified amount of monetary damages on behalf of the purported class and an award of costs and expenses, including counsel fees and expert fees.
−Removed: The complaint, as amended, was dismissed with prejudice on April 27, 2017 and on September 20, 2018, the Third Circuit affirmed the dismissal of the complaint with prejudice.
−Removed: On February 5, 2019, the plaintiffs filed a motion asking the federal district court to exercise its discretion and allow the plaintiffs to reinstate their claims to include additional allegations from the administrative order agreed to by the SEC and the Company in December 2018, which was supplemented by reference to the Company’s subsequently filed litigation against former executives (disclosed below).
−Removed: On September 30, 2019, the federal district court of New Jersey denied the plaintiffs’ motion for relief from the April 27, 2017 judgment and a related motion to allow the filing of a proposed fifth amended complaint.
−Removed: On October 30, 2019, the plaintiffs filed a notice of appeal with the U.S.
−Removed: Court of Appeals for the Third Circuit.
−Removed: The parties fully briefed the appeal and oral argument had been scheduled for June 19, 2020.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: In return, the plaintiffs would voluntarily dismiss all claims in the underlying action with prejudice and withdraw the plaintiffs’ Proofs of Claim with prejudice.
−Removed: On March 12, 2021, the Bankruptcy Court approved the tentative settlement and the terms of the settlement have now been fully implemented.
−Removed: This matter is now closed.
−Removed: Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250 % Unsecured Notes due 2022, (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.
−Removed: (collectively referred to in this summary as “Defendants”).
−Removed: The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v.
−Removed: The Hertz Corporation, et al.
−Removed: pending in the United States Bankruptcy Court for the District of Delaware, Adv.
−Removed: 21-50995 (MFW).
−Removed: The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to
+Added: From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business.
+Added: The Company has summarized below the material legal proceedings to
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
−Removed: On July 2, 2021, Defendants were summoned to file a motion or answer to the Complaint within 30 days.
−Removed: 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.
+Added: which the Company was a party during the year ended December 31, 2022 or the period after December 31, 2022, but before the filing of this 2022 Annual Report.
+Added: Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250 % Unsecured Notes due 2022 (the "2022 Notes"), (2) 5.500 % Unsecured Notes due 2024 (the "2024 Notes"), (3) 7.125 % Unsecured Notes due 2026 (the "2026 Notes"), and (4) 6.000 % Unsecured Notes due 2028 (the "2028 Notes") issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation and multiple direct and indirect subsidiaries thereof (collectively referred to in this summary as “Defendants”).
+Added: The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v.
+Added: The Hertz Corporation, et al.
+Added: in the United States Bankruptcy Court for the District of Delaware, Adv.
+Added: 21-50995 (MFW).
+Added: The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to payment of certain redemption premiums and post-petition interest that they assert total approximately $ 272 million or, in the alternative, are entitled to payment of post-petition interest at a contractual rate that they assert total approximately $ 125 million.
+Added: The Complaint also asserts the right to pre-judgment interest from July 1, 2021, to the date of any judgment.
On December 22, 2021, the Bankruptcy Court dismissed Wells Fargo’s claims with respect to (i) the redemption premium allegedly owed on the 2022 and 2024 Notes and (ii) post-petition interest at the contract rate.
−Removed: As a result, only Wells Fargo’s claims for a redemption premium with respect to the 2026 and 2028 Senior Notes now remain.
−Removed: Additionally, note holders that elected to participate in the 2021 Rights Offering waived their right to collect on the make whole premium.
−Removed: 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.
−Removed: The Defendants dispute that any such amounts are owed and intend to respond and otherwise vigorously defend claims set forth therein.
−Removed: The Company cannot predict the outcome or timing of this litigation.
−Removed: 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.
−Removed: These claims could be material.
−Removed: The Company retains all rights with respect to any such asserted amounts and intends to vigorously defend against any such asserted claims.
−Removed: 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.
−Removed: 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.
−Removed: When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate.
+Added: On November 9, 2022, the Bankruptcy Court ruled that the make-whole premium is the same as unmatured interest and is disallowed under the U.S.
+Added: Bankruptcy Code, granting summary judgment in the Defendants’ favor.
+Added: The Bankruptcy Court certified the matter directly to the U.S.
+Added: Court of Appeals for the Third Circuit (the “Third Circuit”) and, on January 25, 2023, the Third Circuit accepted Wells Fargo’s appeal.
+Added: The Defendants intend to continue to vigorously defend against the claims in this matter through the appellate process.
+Added: The Company cannot predict the ultimate outcome or timing of this litigation.
+Added: Claims Related to Alleged False Arrests - A group of claims involving allegations that the police detained or arrested individuals in error after the Company reported rental cars as stolen have been advanced against the Company.
+Added: These claims first arose from actions allegedly taken by the Company prior to its emergence from bankruptcy reorganization;
+Added: some claims allege post-emergence behavior by the Company.
+Added: These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain members of government.
+Added: The Company has policies to help ensure the proper treatment of its customers and to seek to protect itself against the theft of its services or assets, and has taken significant steps to modernize and update those policies.
+Added: In December 2022, the Company entered into settlement agreements with 364 claimants in full and final resolutions of their claims for an aggregated amount of approximately $ 168 million (the "Settlement"), all of which amount was paid by the Company during December 2022.
+Added: The Settlement resolved nearly all of the false arrest-related claims being advanced in the U.S.
+Added: Bankruptcy Court for the District of Delaware, Adv.
+Added: 20-11247 (MFW) and state court in Delaware (captioned Flannery, et al.
+Added: Hertz Global Holdings, Inc., et al., C.A.
+Added: N22C-07-100 and Okoasia, et al.
+Added: Hertz Global Holdings, Inc., et al., C.A.
+Added: N22C-09-531 ).
+Added: Also as a result of the Settlements, state court matters pending in Pennsylvania, captioned Lovelace, et al.
+Added: Hertz Global Holdings, Inc., et al., Case No.
+Added: 220801729 , and in Florida, captioned Lizasoain, et al.
+Added: Hertz Global Holdings, Inc., et al., Case No.
+Added: 2022-015316-CA-1, were dismissed with prejudice.
+Added: In the small number of claims remaining, the Company continues to vigorously defend itself and believes that the ultimate resolution of such remaining claims will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
+Added: Relatedly, in May 2022, the Company filed a complaint against several of its insurers seeking a determination of its rights under its commercial general liability, and directors and officers liability, insurance policies for these alleged claims in a declaratory judgment action pending in Delaware Superior Court, Hertz Global Holdings, Inc., et al.
+Added: ACE American Insurance Co., et al., C.A.
+Added: N22C-05-130 MMJ (CCLD) .
+Added: The Company believes that a meaningful portion of the amount being paid for the Settlements will ultimately be recovered from its insurance carriers.
The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated.
3 unchanged sentences
It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved.
−Removed: Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.
−Removed: Other Proceedings
−Removed: Litigation Against Former Executives - The Company filed litigation in the U.S.
−Removed: District Court for the District of New Jersey against 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.
−Removed: 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.
−Removed: 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.
−Removed: The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights.
−Removed: In October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas.
−Removed: In September and October 2020, the judge in the New Jersey action entered orders requiring the parties and applicable insurers to attend and participate in mediation.
−Removed: The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020.
−Removed: The mediation was unsuccessful, but settlement discussions continued
+Added: Accordingly, it is possible that an adverse
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider.
−Removed: The Florida action is now closed.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: Other Proceedings
+Added: Litigation Against Former Executives - The Company filed litigation in the U.S.
+Added: District Court for the District of New Jersey against former executives Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against former executive Scott Sider on March 28, 2019.
+Added: The complaints predominantly alleged breach of contract and sought repayment of incentive-based compensation received by the defendants in connection with restatements included in the former Hertz Global Holdings, Inc.
+Added: ("Old Hertz Holdings") Form 10-K for the year ended December 31, 2014 and related accounting for prior periods.
+Added: The complaints also sought recovery for the costs of an SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and other damages resulting from the necessity of the restatements.
+Added: The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights.
+Added: In October 2019, the Company entered into a confidential settlement agreement with Elyse Douglas and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider, closing the Florida action.
+Added: Additionally, on December 29, 2021, the Company entered into a confidential settlement agreement with Jeff Zimmerman, leaving Mark Frissora as the sole remaining defendant in the New Jersey action.
+Added: Fact and expert discovery have been completed and competing dispositive motions were fully briefed as of October 26, 2022.
+Added: Pursuant to the agreements governing the separation of Herc Holdings Inc.
+Added: from Hertz Global that occurred on June 30, 2016, Herc Holdings Inc.
+Added: is entitled to 15 % of the net proceeds of any repayment or recovery from these cases.
Indemnification Obligations
10 unchanged sentences
Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim.
−Removed: In connection with the Spin-Off, the Company executed an agreement with Herc Holdings that contains mutual indemnification clauses and a customary indemnification provision with respect to liability arising out of or resulting from assumed legal matters.
+Added: In connection with the separation of the car rental business in 2016, the Company executed an agreement with Herc Holdings Inc.
+Added: that contains mutual indemnification clauses and a customary indemnification provision with respect to liability arising out of or resulting from assumed legal matters.
The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable.
2 unchanged sentences
In June 2019, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $ 425 million with an expiration in June 2020 (the "2019 Master Loan").
−Removed: The interest rate was based on the U.S.
−Removed: Dollar LIBOR rate plus a margin.
−Removed: 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.
−Removed: 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.
−Removed: On the Effective Date, the $ 65 million tax-related liability from Hertz to Hertz Holdings was reinstated.
−Removed: 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.
−Removed: 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").
−Removed: The interest rate was based on the U.S.
−Removed: Dollar LIBOR rate plus a margin.
−Removed: As of December 31, 2020, there was $ 1 million outstanding under the New Loan representing advances and any accrued but unpaid interest.
+Added: As a result of the Chapter 11 Cases, the full amount outstanding under the 2019 Master Loan was deemed uncollectible, resulting in a charge of $ 133 million during the second quarter of 2020.
+Added: Additionally, the loan due to an affiliate, which represented a tax-related liability from Hertz
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
−Removed: The interest rate is based on the U.S.
−Removed: Dollar LIBOR rate plus a margin.
−Removed: 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.
−Removed: As of December 31, 2021, there was no outstanding balance under the 2021 Master Loan.
+Added: to Hertz Holdings, in the amount of $ 65 million was subsequently settled via a non-cash distribution from Hertz to Hertz Holdings in 2021.
Other Relationships
7 unchanged sentences
The 767 Lease Agreement was terminated effective October 31, 2021 as disclosed in Note 3, "Divestitures."
−Removed: Note 16— Equity and Mezzanine Equity – Hertz Global
+Added: Note 17— Equity – Hertz Global
Emergence from Bankruptcy
−Removed: In connection with the Chapter 11 Emergence, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled.
−Removed: 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.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock as follows:
−Removed: • 277,119,438 shares purchased by the Plan Sponsors;
−Removed: • 14,133,024 shares issued, pro rata, to existing stockholders;
−Removed: • 127,362,114 shares issued pursuant to the 2021 Rights Offering;
−Removed: • 52,487,886 shares distributed to the Backstop Parties.
+Added: In connection with the emergence from Chapter 11, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled.
+Added: As of the Effective Date, there were 1,000,000,000 shares of reorganized Hertz Global common stock and 100,000,000 shares of reorganized Hertz Global preferred stock authorized for issuance.
As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: As of December 31, 2021, all 1,500,000 shares of preferred stock were repurchased and retired.
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.
−Removed: The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying consolidated balance sheet of Hertz Global as of December 31, 2021.
+Added: The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying consolidated balance sheets of Hertz Global as of December 31, 2022 and 2021.
The reorganized Hertz Global common stock is not convertible and does not accrue dividends.
−Removed: Dividends, if any, are paid only upon a valid declaration by the Board of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to the Series A Preferred Stock, and applicable debt covenants.
+Added: Dividends, if any, are paid only upon a valid declaration by the Board of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to any issued and outstanding preferred stock, and applicable debt covenants.
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: Hertz Global closed the offering upon emergence from the Chapter 11 Cases on the Effective Date with eligible existing Hertz Global stockholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $ 1.3 billion.
+Added: The unsubscribed portion
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: of the 2021 Rights Offering was backstopped by certain parties (the "Backstop Parties") resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $ 361 million.
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.
5 unchanged sentences
In accordance with the revised articles of incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $ 0.01 per share, have been authorized for issuance.
−Removed: Mezzanine Equity – Series A Preferred Stock
+Added: 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.
−Removed: 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.
−Removed: The first cash dividend payment was payable on the six-month anniversary of the Effective Date.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: 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.
−Removed: Accordingly, the Series A Preferred Stock was classified as mezzanine equity upon issuance and recorded at its redemption amount.
−Removed: 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.
−Removed: Tender Offer for Repurchase of Series A Preferred Stock
−Removed: 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 .
−Removed: 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.
−Removed: 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.
+Added: On December 21, 2021, all shares of the Series A Preferred Stock were repurchased at a price of $ 1,250 per share for aggregate payments by Hertz Global of $ 1.9 billion.
+Added: Hertz Global funded such share repurchases with available cash, including proceeds from the offering of the Senior Notes Due 2026 and Senior Notes Due 2029 which were contributed to Hertz Global through a dividend distribution from Hertz.
The repurchased shares of Series A Preferred Stock were simultaneously retired.
−Removed: 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).
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Registration Status of Stock Issued on the Effective Date and Nasdaq Listing
−Removed: 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.
−Removed: 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.
+Added: The difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees, of $ 450 million was recorded in Hertz Global's additional paid in capital as of December 31, 2021, and accordingly, was subtracted from net income available to common stockholders of Hertz Global for purposes of calculating basic and diluted earnings per share for the year ended December 31, 2021.
+Added: Nasdaq Listing
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.
1 unchanged sentence
In conjunction with the registration of Hertz Global's common stock in the Nasdaq listing, certain selling stockholders offered and sold 44,520,000 shares of Hertz Global's common stock to the public.
−Removed: Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate
+Added: Of these shares, Hertz Global repurchased from the underwriters 10,344,828 shares for an aggregate purchase price of $ 300 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2022 and 2021.
+Added: Share Repurchase Programs for Common Stock
+Added: On November 29, 2021, Hertz Global's Board approved the 2021 Share Repurchase Program that authorized the repurchase of up to $ 2.0 billion worth of shares of Hertz Global's outstanding common stock.
+Added: Between the inception of the 2021 Share Repurchase Program and December 31, 2021, a total of 17,106,026 shares of Hertz Global's
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: purchase price of $ 300 million which is included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021.
−Removed: Share Repurchase Program for Common Stock
−Removed: 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.
+Added: common stock were repurchased by Hertz Global at an average share price of $ 23.83 , resulting in an aggregate purchase price of $ 408 million.
+Added: In 2022, the Company completed the 2021 Share Repurchase Program by repurchasing 80,677,021 shares of Hertz Global's common stock during the first and second quarters of 2022 at an average share price of $ 19.74 for an aggregate purchase price of $ 1.6 billion.
+Added: Under the completed 2021 Share Repurchase Program, a total of 97,783,047 shares of Hertz Global common stock were repurchased for an aggregate purchase price of $ 2.0 billion.
+Added: In June 2022, Hertz Global's Board of Directors approved the 2022 Share Repurchase Program that authorized additional repurchases of up to an incremental $ 2.0 billion worth of shares of Hertz Global's outstanding common stock.
+Added: Between the inception and December 31, 2022, a total of 47,303,009 shares of Hertz Global's common stock were repurchased under the 2022 Share Repurchase Program at an average share price of $ 17.64 for an aggregate purchase price of $ 835 million .
+Added: Between January 1, 2023 and January 26, 2023, a total of 1,079,647 shares of Hertz Global's common stock were repurchased under the 2022 Share Repurchase Program at an average share price of $ 16.51 resulting in an aggregate purchase price of $ 18 million.
+Added: Common shares repurchased are included in treasury stock in the accompanying Hertz Global consolidated balance sheets as of December 31, 2022 and 2021.
+Added: Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.
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.
1 unchanged sentence
There can be no assurance as to the timing or number of shares of any repurchases.
−Removed: 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.
−Removed: This amount was included in treasury stock in the accompanying Hertz Global consolidated balance sheet as of December 31, 2021.
−Removed: 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.
−Removed: Stockholders' Equity Prior to Plan of Reorganization
−Removed: Equity of Hertz Global Holdings, Inc.
−Removed: 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.
−Removed: In accordance with the Plan of Reorganization, all pre-reorganization equity interests were cancelled as of the Effective Date.
−Removed: 2019 Rights Offering
−Removed: 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").
−Removed: 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.
−Removed: Open Market Sale Agreement
−Removed: 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").
−Removed: 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.
−Removed: On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled.
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 18— Earnings (Loss) Per Common Share – Hertz Global
1 unchanged sentence
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.
−Removed: 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.
+Added: For the years ended December 31, 2022 and 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: As disclosed in Note 17, "Equity – Hertz Global," in December 2021 all shares of the Series A Preferred Stock were repurchased by Hertz Global.
+Added: The difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global was deemed a dividend to the holders of Hertz Global's Series A Preferred Stock, along with certain fees for purposes of computing basic and diluted earnings per share below.
+Added: As dividends represent earnings that were not available to the holders of Hertz Global's common stock when computing basic and diluted earnings (loss) per common share, they are reflected as an adjustment to net income (loss) available to common stockholders when computing basic and diluted earnings (loss) per common share for Hertz Global for the year ended December 31, 2021.
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth the computation of basic and diluted earnings (loss) per common share:
3 unchanged sentences
Series A Preferred Stock deemed dividends (1)
−Removed: Net income (loss) available to Hertz Global common stockholders $ ( 84 ) $ ( 1,714 ) $ ( 58 )
+Added: Net income (loss) available to Hertz Global common stockholders, basic 2,059 ( 84 ) ( 1,714 )
+Added: Change in fair value of Public Warrants ( 704 ) — —
+Added: Net income (loss) available to Hertz Global common stockholders, diluted $ 1,355 $ ( 84 ) $ ( 1,714 )
Basic weighted-average common shares outstanding 379 315 150
−Removed: 2019 Rights Offering adjustment (2)
+Added: Dilutive effect of stock options, RSUs and PUs 1 — —
+Added: Dilutive effect of Public Warrants 23 — —
Diluted weighted-average common shares outstanding (2)
Antidilutive Public Warrants — 14 —
−Removed: Antidilutive stock options, RSUs, PSUs and PSAs 1 2 2
+Added: Antidilutive stock options, RSUs and PSUs 6 1 2
Total antidilutive 6 15 2
2 unchanged sentences
Diluted $ 3.36 $ ( 0.27 ) $ ( 11.44 )
−Removed: (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.
−Removed: (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.
+Added: (1) Reflects the difference between the carrying value of the Series A Preferred Stock and the redemption value paid by Hertz Global, including approximately $ 7 million in certain fees.
(2) Under the Plan of Reorganization approved by the Bankruptcy Court, the 2021 Rights Offering subscription was made available to eligible existing stockholders on a pro rata basis to their existing common stock interests;
−Removed: therefore earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date for the 2021 Rights Offering.
+Added: therefore diluted earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date for the 2021 Rights Offering.
Note 19— Public Warrants - Hertz Global
−Removed: On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $ 13.80 per Public
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Warrant, subject to certain conditions.
+Added: On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $ 13.80 per Public Warrant, subject to certain conditions.
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.
4 unchanged sentences
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.
+Added: During the year ended December 31, 2022, 245,959 Public Warrants were exercised, of which 60,661 were cashless exercises and 185,298 were exercised for $ 13.80 per share.
The Public Warrants are freely transferable, subject only to applicable securities laws and the restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock.
−Removed: On November 9, 2021, the Public Warrants began trading on Nasdaq under the symbol HTZWW.
−Removed: The Public Warrants previously traded on the over-the-counter market.
+Added: On November 9, 2021, the
+Added: HERTZ GLOBAL HOLDINGS, INC.
+Added: AND SUBSIDIARIES
+Added: THE HERTZ CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Public Warrants began trading on Nasdaq under the trading 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).
−Removed: The Public Warrants are recorded at fair value in the accompanying consolidated balance sheet as of December 31, 2021.
+Added: The Public Warrants are recorded at fair value in the accompanying consolidated balance sheets as of December 31, 2022 and 2021.
See Note 13, "Fair Value Measurements."
Note 20— Segment Information
−Removed: The Company’s CODM assesses performance and allocates resources based upon the financial information for the Company’s reportable segments.
−Removed: 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.
−Removed: Accordingly, prior periods have been restated to conform with the revised presentation.
+Added: The Company's chief operating decision maker assesses performance and allocates resources based upon the financial information for the Company's reportable segments.
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:
−Removed: • 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;
−Removed: • 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.
−Removed: 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.
+Added: • Americas RAC - Rental of vehicles, as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean;
+Added: • International RAC - Rental of vehicles, as well as sales of value-added services, in locations other than the U.S., Canada, Latin America and the Caribbean.
+Added: 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).
12 unchanged sentences
Total Hertz Global and Hertz $ 8,685 $ 7,336 $ 5,258
−Removed: Depreciation of revenue earning vehicles and lease charges
+Added: Depreciation of revenue earning vehicles and lease charges, net
Americas RAC $ 553 $ 343 $ 1,352
35 unchanged sentences
Total reportable segments 12,495 9,226
−Removed: All other operations (1)(3)
Total Hertz Global and Hertz $ 12,495 $ 9,226
3 unchanged sentences
Total reportable segments 546 516
−Removed: All other operations (1)(4)
Total Hertz Global and Hertz $ 637 $ 608
2 unchanged sentences
Total reportable segments 21,283 17,330
−Removed: All other operations (1)(5)
Total Hertz Global (2)
4 unchanged sentences
(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021.
−Removed: (2) Depreciation for the Donlen business was suspended while classified as held for sale.
−Removed: See Note 3, "Divestitures."
−Removed: (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."
−Removed: (4) Includes $ 6 million of property and equipment, net classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."
−Removed: (5) Includes $ 1.8 billion of assets classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."
−Removed: (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.
+Added: (2) The consolidated total assets of Hertz Global and Hertz as of December 31, 2022 and 2021 included total assets of VIEs of $ 1.3 billion and $ 734 million, respectively, which can only be used to settle obligations of the VIEs.
See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "Termination of 767 Auto Leasing Agreement" in Note 3, "Divestitures," for further information.
−Removed: (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.
58 unchanged sentences
Total Hertz $ 22,496 $ 19,780
−Removed: (1) Includes $ 1.8 billion of assets classified as held for sale as of December 31, 2020 as disclosed in Note 3, "Divestitures."
−Removed: (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 reportable segment to consolidated amounts are summarized below:
17 unchanged sentences
Technology-related intangible and other asset impairments (6)
−Removed: Information technology and finance transformation costs (7)
−Removed: ( 12 ) ( 42 ) ( 114 )
Reorganization items, net (7)
4 unchanged sentences
Change in fair value of Public Warrants (10)
+Added: 704 ( 627 ) —
+Added: Unrealized gains (losses) on financial instruments (11)
+Added: Litigation settlements (12)
Other items (13)
+Added: ( 112 ) 24 ( 66 )
Income (loss) before income taxes $ 2,449 $ 683 $ ( 2,052 )
21 unchanged sentences
Technology-related intangible and other asset impairments (6)
−Removed: Write-off of intercompany loan (13)
−Removed: Information technology and finance transformation costs (7)
−Removed: ( 12 ) ( 42 ) ( 114 )
Reorganization items, net (7)
3 unchanged sentences
Gain from the Donlen Sale (9)
+Added: Unrealized gains (losses) on financial instruments (11)
+Added: Litigation settlements (12)
Other items (13)
+Added: ( 112 ) 24 ( 66 )
+Added: Write-off of intercompany loan (14)
Income (loss) before income taxes $ 1,745 $ 1,474 $ ( 2,183 )
(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."
−Removed: (2) Represents other reconciling items primarily consisting of general corporate expenses as well as other business activities.
−Removed: (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.
−Removed: See Note 6, "Debt," for further information.
+Added: (2) Represents other reconciling items primarily consisting of general corporate expenses and non-vehicle interest expense, as well as other business activities.
+Added: (3) In 2021, includes $ 8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement resulting from the implementation of the Plan of Reorganization.
(4) Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.
3 unchanged sentences
(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."
−Removed: (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) Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 21, "Reorganization Items, Net."
−Removed: (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.
+Added: (8) Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the reorganization, such as professional fees.
Also, includes certain non-debtor financing and professional fee charges.
(9) Represents the net gain from the sale of the Company's Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures."
−Removed: (11) Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.
−Removed: (12) Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests.
−Removed: 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.
−Removed: For 2020, also includes $ 16 million associated with the Donlen Asset Sale, partially offset by $ 18 million for losses associated with certain vehicle damages.
−Removed: For 2019, also includes a $ 30 million gain on marketable securities and a $ 39 million gain on the sale of non-vehicle capital assets.
−Removed: (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."
+Added: (10) Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants.
+Added: (11) Represents unrealized gains (losses) on derivative financial instruments.
+Added: See Note 12, "Financial Instruments."
+Added: (12) Represents payments made for the settlement of certain claims related to alleged false arrests.
+Added: See Note 15, "Contingencies and Off-Balance Sheet Commitments."
+Added: (13) Represents miscellaneous items.
+Added: For 2022, primarily includes certain bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims and certain non-cash stock-based compensation charges.
+Added: For 2021, primarily includes $ 100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by $ 17 million for certain professional fees, $ 14 million of charges related to the settlement of bankruptcy claims, charges for a multiemployer pension plan withdrawal liability and letter of credit fees.
+Added: For 2020, primarily includes $ 16 million associated with the Donlen Sale, partially offset by charges of $ 18 million for losses associated with certain vehicle damages which were recorded in the second quarter, costs associated with the Company's information technology and finance transformation programs, partially offset by a $ 20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Note 20— Liabilities Subject to Compromise
−Removed: 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.
−Removed: These amounts represented the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases.
−Removed: The following table summarizes liabilities subject to compromise as of December 31, 2020:
−Removed: (In millions) December 31, 2020
−Removed: Accounts payable $ 267
−Removed: Accrued liabilities (1)
−Removed: Accrued taxes, net 19
−Removed: Accrued interest on debt subject to compromise 70
−Removed: Debt subject to compromise (2)
−Removed: Liabilities subject to compromise - Hertz Global 4,965
−Removed: Due from affiliate - Hertz (3)
−Removed: Liabilities subject to compromise - Hertz $ 5,030
−Removed: (1) Included $ 24 million of U.S.
−Removed: pension benefit obligation reported as liabilities subject to compromise as of December 31, 2020.
−Removed: (2) See Note 6, "Debt," for details of Pre-petition, non-vehicle debt reported as liabilities subject to compromise as of December 31, 2020.
−Removed: (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.
−Removed: 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.
−Removed: 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.
−Removed: (In millions) Effective Date
−Removed: Reinstated on the Effective Date:
−Removed: Accounts payable $ 257
−Removed: Accrued liabilities 99
−Removed: Accrued taxes, net 14
−Removed: Liabilities reinstated - Hertz Global 370
−Removed: Stockholder's equity - Due to affiliate - Hertz (1)
−Removed: Liabilities reinstated - Hertz $ 435
−Removed: (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.
+Added: (14) For 2020, represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 16, "Related Party Transactions."
Note 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables summarize reorganization items, net:
23 unchanged sentences
See Note 6, "Debt," for further information.
−Removed: (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.
+Added: (2) Breakup fee paid to prior plan sponsors and certain of their respective affiliates and holders of certain notes upon emergence from Chapter 11 in accordance with an equity purchase and commitment agreement entered into on April 3, 2021, which was subsequently terminated.
(3) See Note 8, "Stock-Based Compensation," for further details.
−Removed: Cash payments during the years ended December 31, 2021 and 2020 totaled $ 485 million and $ 102 million, respectively.
−Removed: As of December 31, 2021, $ 25 million was recorded in accounts payable in the accompanying consolidated balance sheet as of December 31, 2021.
−Removed: 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.
+Added: Cash payments during the year ended December 31, 2021 totaled $ 485 million.
+Added: As of December 31, 2021, $ 25 million was recorded in accounts payable in the accompanying consolidated balance sheet, which was paid through the claim settlement process during the first half of 2022.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
3 unchanged sentences
Cash and cash equivalents $ — $ 1
−Removed: Restricted cash and restricted cash equivalents — 28
−Removed: Total cash, cash equivalents, restricted cash and restricted cash equivalents 1 28
+Added: Restricted cash and cash equivalents — —
+Added: Total cash and cash equivalents and restricted cash and cash equivalents — 1
Non-vehicle receivables, net of allowance — 1
2 unchanged sentences
Deferred income taxes, net 3 2
−Removed: Due from Hertz — 65
Total assets $ 3,283 $ 4,355
2 unchanged sentences
Public Warrants 617 1,324
−Removed: Due to Hertz — 1
−Removed: Investments in subsidiaries, net — 42
Total liabilities 638 1,378
3 unchanged sentences
Additional paid-in capital 6,326 6,209
−Removed: Accumulated deficit ( 2,315 ) ( 2,681 )
+Added: Retained earnings (Accumulated deficit) ( 256 ) ( 2,315 )
Accumulated other comprehensive income (loss) ( 294 ) ( 214 )
46 unchanged sentences
Proceeds from Plan Sponsors — 2,781 —
−Removed: Proceeds from rights offerings, net 1,639 — 748
+Added: Proceeds from 2021 Rights Offering, net — 1,639 —
Contributions to Hertz — ( 5,642 ) —
Proceeds from exercises of Public Warrants 3 77 —
−Removed: Proceeds from issuance of preferred stock 1,433 — —
+Added: Proceeds from issuance of preferred stock, net — 1,433 —
Distributions to common stockholders — ( 239 ) —
−Removed: Purchases of treasury shares ( 654 ) — —
+Added: Share repurchases ( 2,461 ) ( 654 ) —
Repurchase of preferred stock — ( 1,883 ) —
−Removed: Payments for Nasdaq listing costs ( 9 ) — —
Dividends from Hertz 2,477 2,470 —
2 unchanged sentences
Net cash provided by (used in) financing activities ( 1 ) ( 27 ) 31
−Removed: Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period ( 27 ) 28 —
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 28 — —
−Removed: Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 1 $ 28 $ —
+Added: Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period ( 1 ) ( 27 ) 28
+Added: Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 1 28 —
+Added: Cash and cash equivalents and restricted cash and cash equivalents at end of period $ — $ 1 $ 28
The accompanying notes are an integral part of these financial statements.
9 unchanged sentences
On June 30, 2021, these entities emerged from bankruptcy.
−Removed: The Chapter 11 Cases were being jointly administered by the Bankruptcy Court under the caption In re The Hertz Corporation, et al., Case No.
−Removed: 20-11218 (MFW) .
−Removed: 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.
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.
1 unchanged sentence
Note 2— Contingencies
−Removed: For a discussion of the commitments and contingencies of Hertz Holdings, refer to the sections below included in Note 14, "Contingencies and Off-Balance Sheet Commitments," to the Notes to its consolidated financial statements included in this 2021 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
−Removed: • In re Hertz Global Holdings, Inc.
−Removed: Securities Litigation
+Added: For a discussion of the commitments and contingencies of Hertz Holdings, refer to the section below included in Note 15, "Contingencies and Off-Balance Sheet Commitments," to the Notes to its consolidated financial statements included in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
• Litigation Against Former Executives
1 unchanged sentence
Note 3— Dividends
−Removed: 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.
−Removed: Note 4— Share Repurchase
−Removed: 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
−Removed: SCHEDULE I (Continued)
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: NOTES TO PARENT COMPANY FINANCIAL STATEMENTS (continued)
−Removed: 27,450,854 shares for $ 708 million.
−Removed: This amount was included in treasury stock in the accompanying parent-only balance sheets of Hertz Holdings as of December 31, 2021.
−Removed: Between January 1, 2022 and February 17, 2022, Hertz Holdings repurchased a total of 20,589,620 shares for $ 431 million.
−Removed: Note 5— Transactions with Affiliates and Investments in Subsidiaries
−Removed: 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."
−Removed: 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.
+Added: In 2022, $ 2.5 billion in cash dividends were paid to Hertz Holdings to fund common stock repurchases and in 2021, $ 2.5 billion in cash dividends were paid by Hertz to Hertz Holdings to fund preferred stock and common stock share repurchases, as further disclosed in Note 17, "Equity – Hertz Global" to the Notes to its consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Additionally, in December 2021, a $ 65 million tax-related liability for a loan due from Hertz to Hertz Holdings was settled via a non-cash distribution as further disclosed in Note 16, "Related Party Transactions," to the Notes to its consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." There were no non-cash dividends paid by Hertz in 2022, 2021 or 2020.
+Added: Note 4— Share Repurchases
+Added: For a discussion of the share repurchase programs of Hertz Holdings, refer to Note 17, "Equity – Hertz Global" to the Notes to its consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." In 2022 and 2021, Hertz Holdings repurchased 127,980,030 shares and 27,450,854 shares, respectively, for $ 2.4 billion and $ 708 million, respectively.
+Added: These amounts are included in treasury stock in the accompanying parent-only balance sheets of Hertz Holdings as of December 31, 2022 and 2021.
+Added: Between January 1, 2023 and January 26, 2023, Hertz Holdings repurchased a total of 1,079,647 shares for $ 18 million.
VALUATION AND QUALIFYING ACCOUNTS
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Year ended December 31, 2021 46 125 — ( 121 ) (1)
−Removed: — ( 83 ) (1)(2)
Year ended December 31, 2020 35 94 (2)
+Added: — ( 83 ) (1)(2)
Tax valuation allowances:
3 unchanged sentences
(1) Amounts written off, net of recoveries.
−Removed: (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."
+Added: (2) Activity includes allowances associated with Donlen while classified as held for sale prior to completion of the Donlen Sale on March 30, 2021, as disclosed in Note 3, "Divestitures," to the notes to the Company's consolidated financial statements in this 2022 Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."
+Added: (3) Activity represents the release of a valuation allowance.
HERTZ GLOBAL HOLDINGS, INC.
19 unchanged sentences
Changes in Internal Control over Financial Reporting
−Removed: Remediation of Previously Reported Material Weakness
−Removed: 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.
−Removed: HERTZ GLOBAL HOLDINGS, INC.
−Removed: AND SUBSIDIARIES
−Removed: THE HERTZ CORPORATION AND SUBSIDIARIES
−Removed: CONTROLS AND PROCEDURES (Continued)
−Removed: During 2021, we implemented our previously disclosed remediation plan, which included completing the following remediation actions:
−Removed: • 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.
−Removed: • 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.
−Removed: • Administered enhanced re-trainings for ITGC control owners regarding risks, controls and maintaining adequate evidence.
−Removed: • Improved existing de-provisioning controls for timely execution of removal of terminated user access.
−Removed: • 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.
−Removed: 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.
−Removed: 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.
+Added: There were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
HERTZ CORPORATION
Evaluation of Disclosure Controls and Procedures
−Removed: 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.
−Removed: 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.
−Removed: Management’s Report on Internal Control over Financial Reporting
−Removed: 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).
−Removed: Internal control over financial reporting has inherent limitations.
−Removed: Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
−Removed: Internal control over financial reporting can also be circumvented by collusion or improper management override.
−Removed: Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting.
−Removed: Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this inherent risk.
−Removed: Management, including our Chief Executive Officer and our Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.
−Removed: 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).
−Removed: Based on this assessment, management has concluded that we did maintain effective internal control over financial reporting as of December 31, 2021.
+Added: 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
HERTZ GLOBAL HOLDINGS, INC.
2 unchanged sentences
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.