0001657853-21-000092 | 10-Q | XBRL Viewer | Hertz Global Holdings INC

Total cash, cash equivalents, restricted cash and restricted cash equivalents

763

411

3,466

1,507

890

777

Revenue earning vehicles, net

642

373

Revenue earning vehicles:

10,122

7,540

Less: accumulated depreciation

(1,559)

(1,478)

Total revenue earning vehicles, net

8,563

6,062

Property and equipment, net

609

666

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

1,453

1,675

Intangible assets, net

2,925

2,992

Goodwill

1,045

Assets held for sale

1,811

Total assets

^[1]

19,593

16,908

586

418

904

759

228

121

8,718

6,267

Public Warrants

783

1,402

1,636

470

488

Total liabilities not subject to compromise

851

730

13,942

10,419

Liabilities subject to compromise

4,965

Liabilities held for sale

1,431

Total liabilities

^[1]

13,942

16,815

Commitments and contingencies

Mezzanine Equity:

Preferred stock, $0.01 par value, 1,500,000 shares issued and outstanding at September 30, 2021

1,433

Total mezzanine equity

1,433

Stockholders' equity:

Preferred stock, $0.01 par value, no shares issued and outstanding at December 31, 2020

Common stock, value, issued

Treasury stock, at cost, 2,028,932 shares at December 31, 2020

(100)

Additional paid-in capital

6,482

3,047

Retained earnings (Accumulated deficit)

(2,055)

(2,681)

Accumulated other comprehensive income (loss)

(226)

(212)

Stockholders' equity attributable to Hertz Global

4,206

Noncontrolling interests

Total stockholders' equity

4,218

Total liabilities, mezzanine equity and stockholders' equity

19,593

16,908

Vehicles

ASSETS

320

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

139

164

7,207

6,024

Non-vehicle

ASSETS

443

361

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

751

613

540

389

Cash and cash equivalents

1,511

243

The Hertz Corporation

ASSETS

2,703

1,096

Total cash, cash equivalents, restricted cash and restricted cash equivalents

763

383

3,466

1,479

890

777

Due from Hertz Holdings

Revenue earning vehicles, net

642

372

Revenue earning vehicles:

10,122

7,540

Less: accumulated depreciation

(1,559)

(1,478)

Total revenue earning vehicles, net

8,563

6,062

Property and equipment, net

609

666

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

1,453

1,675

Intangible assets, net

2,925

2,992

Goodwill

1,045

Assets held for sale

1,811

Total assets

^[2]

19,593

16,880

586

418

905

759

228

121

8,718

6,267

1,402

1,636

470

488

Total liabilities not subject to compromise

851

735

13,160

10,424

Liabilities subject to compromise

5,030

Liabilities held for sale

1,431

Total liabilities

^[2]

13,160

16,885

Commitments and contingencies

Stockholders' equity:

Common stock, value, issued

Additional paid-in capital

9,587

3,953

Due to Hertz Holdings

Retained earnings (Accumulated deficit)

(3,005)

(3,783)

Accumulated other comprehensive income (loss)

(226)

(212)

Stockholders' equity attributable to Hertz Global

6,421

(42)

Noncontrolling interests

Total stockholders' equity

6,433

(5)

Total liabilities, mezzanine equity and stockholders' equity

19,593

16,880

The Hertz Corporation | Variable Interest Entity, Primary Beneficiary

Revenue earning vehicles:

Total assets

745

511

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Total liabilities

734

475

The Hertz Corporation | Vehicles

ASSETS

320

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

139

164

The Hertz Corporation | Non-vehicle

7,207

6,024

ASSETS

443

333

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

751

613

540

389

Beginning Balance (in shares) at Dec. 31, 2019

$ 1,511

$ 243

[1]

Hertz Global Holdings, Inc.'s consolidated total assets as of September 30, 2021 and December 31, 2020 include total assets of variable interest entities (“VIEs”) of $745 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of September 30, 2021 and December 31, 2020 include total liabilities of VIEs of $734 million and $475 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc. See "Pledges Related to Vehicle Financing " in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 15, "Related Party Transactions," for further information.

[2]

The Hertz Corporation's consolidated total assets as of September 30, 2021 and December 31, 2020 include total assets of VIEs of $745 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of September 30, 2021 and December 31, 2020 include total liabilities of VIEs of $734 million and $475 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation. See "Pledges Related to Vehicle Financing " in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 15, "Related Party Transactions," for further information.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Preferred stock, par value (in dollars per share)	$ 0.01
Preferred stock, shares issued	1,500,000
Preferred stock, shares outstanding	1,500,000
Preferred stock, par value (in dollars per share)		$ 0.01
Preferred stock, shares issued		0
Preferred stock, shares outstanding		0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	471,528,459	158,235,410
Common stock, shares outstanding	471,528,459	156,206,478
Treasury stock, shares repurchased		2,028,932
Non-vehicle
Receivables, allowance for doubtful accounts (in dollars)	$ 58	$ 46
The Hertz Corporation
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100
The Hertz Corporation \| Non-vehicle
Receivables, allowance for doubtful accounts (in dollars)	$ 58	$ 46

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Revenues	$ 2,226	$ 1,268	$ 5,387	$ 4,023
Expenses:
Direct vehicle and operating	1,131	779	2,855	2,624
Depreciation of revenue earning vehicles and lease charges	61	347	420	1,632
Selling, general and administrative	177	138	498	506
Total interest expense, net	63	127	400	478
Technology-related intangible and other asset impairments	0	0	0	193
Other (income) expense, net	(7)	0	(20)	(15)
Reorganization items, net	0	78	677	101
(Gain) from the sale of a business	0	0	(400)	0
Change in fair value of Public Warrants		0	(16)	0
Total expenses	1,458	1,527	4,567	5,687
Income (loss) before income taxes	768	(259)	820	(1,664)
Income tax (provision) benefit	(160)	36	(193)	232
Net income (loss)	608	(223)	627	(1,432)
Net (income) loss attributable to noncontrolling interests	(3)	1	(1)	7
Net income (loss) attributable to Hertz	605	(222)	626	(1,425)
Net income (loss) available to Hertz Global common stockholders	$ 571	$ (222)	$ 592	$ (1,425)
Weighted-average common shares outstanding:
Basic (in shares)	471	156	264	148
Diluted (in shares)	490	156	270	148
Earnings (loss) per common share:
Basic (in dollars per share)	$ 1.21	$ (1.42)	$ 2.25	$ (9.65)
Diluted (in dollars per share)	$ 1.13	$ (1.42)	$ 2.14	$ (9.65)
Series A Preferred Stock
Expenses:
Dividends on Series A Preferred Stock	$ (34)	$ 0	$ (34)	$ 0
Vehicles
Expenses:
Total interest expense, net	41	110	243	360
Non-vehicle
Expenses:
Non-vehicle depreciation and amortization	49	58	153	168
Total interest expense, net	22	17	157	118
The Hertz Corporation
Revenues:
Revenues	2,226	1,268	5,387	4,023
Expenses:
Direct vehicle and operating	1,131	779	2,855	2,624
Depreciation of revenue earning vehicles and lease charges	61	347	420	1,632
Selling, general and administrative	177	138	498	506
Total interest expense, net	63	127	400	476
Technology-related intangible and other asset impairments	0	0	0	193
Write-off of intercompany loan	0	0	0	133
Other (income) expense, net	(7)	0	(20)	(15)
Reorganization items, net	0	78	513	101
(Gain) from the sale of a business	0	0	(400)	0
Total expenses	1,474	1,527	4,419	5,818
Income (loss) before income taxes	752	(259)	968	(1,795)
Income tax (provision) benefit	(156)	36	(189)	259
Net income (loss)	596	(223)	779	(1,536)
Net (income) loss attributable to noncontrolling interests	(3)	1	(1)	7
Net income (loss) attributable to Hertz	593	(222)	778	(1,529)
The Hertz Corporation \| Vehicles
Expenses:
Total interest expense, net	41	110	243	360
The Hertz Corporation \| Non-vehicle
Expenses:
Non-vehicle depreciation and amortization	49	58	153	168
Total interest expense, net	$ 22	$ 17	$ 157	$ 116

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - Non-vehicle - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Contractual interest	$ 53	$ 75
The Hertz Corporation
Contractual interest	$ 53	$ 75

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net income (loss)	$ 608	$ (223)	$ 627	$ (1,432)
Other comprehensive income (loss):
Foreign currency translation adjustments	(24)	(6)	(14)	(32)
Net gain (loss) on pension and postretirement benefit plans	0	15	0	1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses	0	1	0	6
Total other comprehensive income (loss) before income taxes	(24)	10	(14)	(25)
Income tax (provision) benefit related to pension and postretirement benefit plans	0	(4)	0	0
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans	0	(1)	0	(2)
Total other comprehensive income (loss)	(24)	5	(14)	(27)
Total comprehensive income (loss)	584	(218)	613	(1,459)
Comprehensive (income) loss attributable to noncontrolling interests	(3)	1	(1)	7
Comprehensive income (loss) attributable to Hertz Global	581	(217)	612	(1,452)
The Hertz Corporation
Net income (loss)	596	(223)	779	(1,536)
Other comprehensive income (loss):
Foreign currency translation adjustments	(24)	(6)	(14)	(32)
Net gain (loss) on pension and postretirement benefit plans	0	15	0	1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses	0	1	0	6
Total other comprehensive income (loss) before income taxes	(24)	10	(14)	(25)
Income tax (provision) benefit related to pension and postretirement benefit plans	0	(4)	0	0
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans	0	(1)	0	(2)
Total other comprehensive income (loss)	(24)	5	(14)	(27)
Total comprehensive income (loss)	572	(218)	765	(1,563)
Comprehensive (income) loss attributable to noncontrolling interests	(3)	1	(1)	7
Comprehensive income (loss) attributable to Hertz Global	$ 569	$ (217)	$ 764	$ (1,556)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)
$ in Millions

Total

The Hertz Corporation

Stockholders' Equity Attributable to Hertz Global

The Hertz Corporation

Preferred Stock Shares

Common Stock Shares

The Hertz Corporation

Additional Paid-In Capital

The Hertz Corporation

Due From Affiliate

The Hertz Corporation

Due To Affiliate

The Hertz Corporation

Accumulated Deficit

The Hertz Corporation

^[1]

Accumulated Other Comprehensive Income (Loss)

The Hertz Corporation

Treasury Stock

Non- controlling Interests

The Hertz Corporation

142,000,000

100

2,000,000

Beginning Balance at Dec. 31, 2019

$ 1,888

$ 1,884

$ 1,769

$ 1,765

$ 0

$ 1

$ 0

$ 3,024

$ 3,955

$ (64)

$ (967)

$ (1,937)

$ (189)

$ (100)

$ 119

(357)

(356)

(355)

(356)

(355)

(1)

Due from Hertz Holdings

(3)

Net settlement on vesting of restricted stock

(39)

(2)

Contributions from noncontrolling interests

Ending Balance (in shares) at Mar. 31, 2020

142,000,000

100

2,000,000

Ending Balance at Mar. 31, 2020

1,491

1,487

1,372

1,368

$ 0

$ 1

$ 0

3,022

3,955

(67)

(1,323)

(2,292)

(228)

$ (100)

119

Beginning Balance (in shares) at Dec. 31, 2019

142,000,000

100

2,000,000

Beginning Balance at Dec. 31, 2019

1,888

1,884

1,769

1,765

$ 0

$ 1

$ 0

3,024

3,955

(64)

(967)

(1,937)

(189)

$ (100)

119

(1,432)

(1,536)

Ending Balance (in shares) at Sep. 30, 2020

(27)

156,000,000

100

2,000,000

Ending Balance at Sep. 30, 2020

400

330

341

271

$ 0

$ 2

$ 0

3,047

3,953

(2,392)

(3,466)

(216)

$ (100)

Beginning Balance (in shares) at Mar. 31, 2020

142,000,000

100

2,000,000

Beginning Balance at Mar. 31, 2020

1,491

1,487

1,372

1,368

$ 0

$ 1

$ 0

3,022

3,955

(67)

(1,323)

(2,292)

(228)

$ (100)

119

Net income (loss) including adjustments

(852)

(847)

(951)

(847)

(951)

(5)

(956)

Due from Hertz Holdings

(1)

Liabilities subject to compromise

^[2]

(65)

Write-off of intercompany loan

^[3]

133

Stock-based compensation charges

(2)

Stock issuance, net (in shares)

14,000,000

Stock issuance, net

$ 1

Ending Balance (in shares) at Jun. 30, 2020

156,000,000

100

2,000,000

Ending Balance at Jun. 30, 2020

673

603

559

489

$ 0

$ 2

$ 0

3,048

3,953

(2,170)

(3,243)

(221)

$ (100)

114

Net income (loss) including adjustments

(223)

(222)

(223)

(222)

(223)

(1)

(224)

Net settlement on vesting of restricted stock

(1)

Ending Balance (in shares) at Sep. 30, 2020

(54)

156,000,000

100

2,000,000

Ending Balance at Sep. 30, 2020

400

330

341

271

$ 0

$ 2

$ 0

3,047

3,953

$ 0

(2,392)

(3,466)

(216)

$ (100)

Ending Balance (in shares) at Mar. 31, 2021

$ 0

Ending Balance at Mar. 31, 2021

$ 0

156,000,000

100,000,000

2,000,000

(5)

(42)

$ 2

$ 0

3,047

3,953

$ 0

(2,681)

^[4]

(3,783)

(212)

$ (100)

189

190

^[4]

190

(1)

Stock-based compensation charges

Ending Balance (in shares) at Mar. 31, 2021

(11)

156,000,000

100,000,000

2,000,000

Ending Balance at Mar. 31, 2021

$ 290

192

265

167

$ 2

$ 0

3,049

3,955

(2,491)

^[4]

(3,593)

(195)

$ (100)

$ 0

1,500,000

2,000,000

$ 1,433

156,000,000

100,000,000

2,000,000

$ 93

(5)

(42)

$ 2

$ 0

3,047

3,953

(2,681)

^[4]

(3,783)

(212)

$ (100)

627

779

(14)

472,000,000

100,000,000

Beginning Balance (in shares) at Mar. 31, 2021

$ 4,218

6,433

4,206

6,421

$ 5

$ 0

6,482

9,587

(2,055)

^[4]

(3,005)

(226)

$ 0

Beginning Balance at Mar. 31, 2021

$ 0

Increase (Decrease) in Temporary Equity [Roll Forward]

Preferred stock issuance, net (in shares)

2,000,000

Preferred stock issuance, net

$ 1,433

Ending Balance (in shares) at Jun. 30, 2021

1,500,000

2,000,000

Ending Balance at Jun. 30, 2021

$ 1,433

Beginning Balance (in shares) at Mar. 31, 2021

156,000,000

100,000,000

2,000,000

Beginning Balance at Mar. 31, 2021

$ 290

192

265

167

$ 2

$ 0

3,049

3,955

(2,491)

^[4]

(3,593)

(195)

$ (100)

(169)

(5)

(168)

(4)

(168)

^[4]

(4)

(1)

Due to Hertz Holdings

Cancellation of common and treasury shares in exchange for new common shares (in shares)

(7)

(142,000,000)

(2,000,000)

Cancellation of common and treasury shares in exchange for new common shares

$ (2)

(98)

$ 100

Cancellation of stock-based awards

(10)

Contributions from Hertz Holdings

5,638

Distributions to common stockholders

(239)

Contribution from Plan Sponsors (in shares)

277,000,000

Contribution from Plan Sponsors

2,781

$ 3

2,778

Rights Offering, net (in shares)

180,000,000

Rights Offering, net

1,798

$ 2

1,796

Public Warrants issuance

(800)

Ending Balance (in shares) at Jun. 30, 2021

(5)

471,000,000

100,000,000

Ending Balance at Jun. 30, 2021

$ 3,639

5,868

3,620

5,849

$ 5

$ 0

6,476

9,583

(2,659)

^[4]

(3,597)

(202)

$ 0

1,500,000

2,000,000

$ 1,433

Net income (loss) including adjustments

$ 608

596

604

592

604

^[4]

592

607

595

Contributions from Hertz Holdings

(24)

Rights Offering, net (in shares)

1,000,000

Rights Offering, net

Exercise of Public Warrants

(10)

472,000,000

100,000,000

Cash flows from operating activities:

$ 4,218

$ 6,433

$ 4,206

$ 6,421

$ 5

$ 0

$ 6,482

$ 9,587

$ 65

$ (2,055)

^[4]

$ (3,005)

$ (226)

$ 0

$ 12

[1]	Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet.
[2]	As a result of filing the Chapter 11 Cases, a pre-petition loan due to an affiliate was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. See Note 17, "Liabilities Subject to Compromise."
[3]	As a result of filing the Chapter 11 Cases, the full amount outstanding under a loan due from affiliate was deemed uncollectible and written off. See Note 15, "Related Party Transactions."
[4]	Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Millions

9 Months Ended

Sep. 30, 2021

Sep. 30, 2020

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

$ 627

$ (1,432)

Depreciation and reserves for revenue earning vehicles

506

1,809

Depreciation and amortization, non-vehicle

153

168

Amortization of deferred financing costs and debt discount (premium)

109

Loss on extinguishment of debt

Provision for receivables allowance

Reorganization items, net

125

(243)

193

314

(Gain) from the sale of a business

(400)

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

(8)

(24)

Change in fair value of Public Warrants

(16)

(6)

(4)

Changes in assets and liabilities:

Non-vehicle receivables

(223)

231

(53)

Non-vehicle accounts payable

203

277

(45)

224

(43)

(47)

(4)

(214)

(287)

Net cash provided by (used in) operating activities

(13)

(75)

1,208

928

Cash flows from investing activities:

Revenue earning vehicles expenditures

(5,196)

(5,188)

Proceeds from disposal of revenue earning vehicles

1,945

8,770

Non-vehicle capital asset expenditures

(41)

(89)

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

Sales of marketable securities

Collateral payments

(303)

Collateral returned in exchange for letters of credit

268

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

871

Net cash provided by (used in) investing activities

(1)

(2,440)

3,622

Payment of financing costs

(154)

(11)

Proceeds from Plan Sponsors

2,781

Proceeds from Rights Offering, net

1,639

Proceeds from the issuance of preferred stock, net

1,433

Distributions to common stockholders

(239)

Proceeds from the issuance of stock, net

Early redemption payments

(85)

Contributions from (distributions to) noncontrolling interests

(25)

(55)

Net cash provided by (used in) financing activities

(2)

3,142

(4,046)

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

(22)

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period

1,888

522

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period

^[1]

1,578

1,360

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period

3,466

1,882

Income taxes, net of refunds

(13)

Supplemental disclosures of non-cash information:

Purchases of revenue earning vehicles included in accounts payable, net of incentives

Sales of revenue earning vehicles included in vehicle receivables

100

575

Purchases of non-vehicle capital assets included in accounts payable

Purchases of non-vehicle capital assets included in liabilities subject to compromise

Revenue earning vehicles and non-vehicle capital assets acquired through capital lease

Public Warrants issuance

800

Cashless exercise of Public Warrants

Backstop equity issuance

164

Vehicles

10,462

4,226

(9,463)

(8,931)

227

275

Non-vehicle

3,139

1,553

(6,346)

(854)

Cash flows from operating activities:

181

The Hertz Corporation

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

779

(1,536)

Depreciation and reserves for revenue earning vehicles

506

1,809

Depreciation and amortization, non-vehicle

153

168

Amortization of deferred financing costs and debt discount (premium)

109

Loss on extinguishment of debt

Provision for receivables allowance

Write-off of intercompany loan

121

(271)

193

133

Reorganization items, net

150

(Gain) from the sale of a business

(400)

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

(8)

(24)

(6)

(2)

Changes in assets and liabilities:

Non-vehicle receivables

(223)

231

(53)

Non-vehicle accounts payable

203

277

(45)

224

(43)

(47)

(4)

(214)

(287)

Net cash provided by (used in) operating activities

(13)

(75)

1,208

931

Cash flows from investing activities:

Revenue earning vehicles expenditures

(5,196)

(5,188)

Proceeds from disposal of revenue earning vehicles

1,945

8,770

Non-vehicle capital asset expenditures

(41)

(89)

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

Sales of marketable securities

Collateral payments

(303)

Collateral returned in exchange for letters of credit

268

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

871

Net cash provided by (used in) investing activities

(1)

(2,440)

3,622

Payment of financing costs

(154)

(11)

Contributions from Hertz Holdings

5,642

Advances to Hertz Holdings

(5)

Early redemption payments

(85)

Contributions from (distributions to) noncontrolling interests

(25)

(55)

Net cash provided by (used in) financing activities

3,170

(4,077)

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

(22)

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period

1,916

494

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period

^[2]

1,550

1,360

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period

3,466

1,854

Income taxes, net of refunds

(13)

Supplemental disclosures of non-cash information:

Purchases of revenue earning vehicles included in accounts payable, net of incentives

Purchases of non-vehicle capital assets included in accounts payable

Purchases of non-vehicle capital assets included in liabilities subject to compromise

Revenue earning vehicles and non-vehicle capital assets acquired through capital lease

The Hertz Corporation | Vehicles

10,462

4,226

(9,463)

(8,931)

Supplemental disclosures of non-cash information:

227

275

Sales of revenue earning vehicles included in vehicle receivables

100

575

The Hertz Corporation | Non-vehicle

3,139

1,553

(6,346)

(854)

Revenue from Contract with Customer [Abstract]

$ 181

$ 78

[1]	Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale at December 31, 2020, prior to the completion of the sale in the first quarter of 2021.
[2]	Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale at December 31, 2020, prior to the completion of the sale in the first quarter of 2021.

Background	9 Months Ended
Background	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Background	Background Hertz Global Holdings, Inc. ("Hertz Global" when including its subsidiaries and VIEs and "Hertz Holdings" when excluding its subsidiaries and VIEs) was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns The Hertz Corporation ("Hertz" and interchangeably with Hertz Global, the "Company"), Hertz Global's primary operating company. 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. Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-owned, licensee and franchisee locations in the United States ("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 previously announced sale of substantially all of the assets and certain liabilities of its Donlen subsidiary (the "Donlen Sale"), a business which provided vehicle leasing and fleet management services. Chapter 11 and Emergence In March 2020, the World Health Organization declared COVID-19 a global pandemic. In response to COVID-19, local and national governments around the world instituted shelter-in-place and similar orders and travel restrictions, and airline and other travel decreased suddenly and dramatically. As a result of the impact of COVID-19 and the associated government responses on travel demand, late in the first quarter of 2020, the Company experienced a high level of rental cancellations and a significant decline in forward bookings. In response, the Company began aggressive actions to eliminate costs. However, it faced significant ongoing expenses, including a large lease payment with respect to its vehicle fleet that increased as a result of COVID-19's impact on the car market. On May 22, 2020 (the "Petition Date"), Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S. and Canada (collectively the "Debtors") filed voluntary petitions for relief (collectively, the "Petitions") under chapter 11 of title 11 ("Chapter 11") of the U.S. Bankruptcy Code (the "Bankruptcy Code") in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Chapter 11 cases (the "Chapter 11 Cases") were jointly administered for procedural purposes only under the caption In re The Hertz Corporation, et al., Case No. 20-11218 (MFW). On May 14, 2021, the Debtors filed the solicitation version of the First Modified Third Amended Joint Chapter 11 Plan of Reorganization of the Debtors (as amended, supplemented or otherwise modified in accordance with its terms, 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 (as supplemented, the "Disclosure Statement"). On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021 (the “Effective Date”), the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11 (the "Chapter 11 Emergence"). On the Effective Date, as a result of the Plan of Reorganization, the reorganized Company received cash proceeds of $7.5 billion comprised of: •$2.8 billion from the purchase of common stock in reorganized Hertz Global by one or more funds associated with Knighthead Capital Management, LLC and its affiliates ("Knighthead"), one or more funds associated with Certares Opportunities LLC and its affiliates ("Certares"), investment funds, separate accounts and other entities owned (in whole or in part), controlled or managed by Apollo Capital Management L.P. and its affiliates (collectively "Apollo" and with Knighthead and Certares (the "Plan Sponsors"), and certain other investment funds and entities; •$1.6 billion from the purchase of common stock in reorganized Hertz Global pursuant to the rights offering (the "Rights Offering") by Hertz Global's former equity holders, holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility and certain equity commitment parties pursuant to their obligations under the Equity Purchase and Commitment Agreement (the "EPCA"); •$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and •$1.5 billion in proceeds from the Company's secured exit term loan facilities. Such cash proceeds were used, in part, to provide payments to the Company's stakeholders pursuant to the terms of the Plan of Reorganization as follows: •the holders of administrative, priority and secured claims received payment in cash in full; •the holders of the approximately $1.0 billion of obligations owed with respect to the Company's debtor-in-possession financing (the "DIP Credit Agreement") received payment in cash in full; •the holders of the Company's Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims; •the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full; •the holders of the Company's €725 million European Vehicle Notes received payment in cash in full; •the holders of the €257 million term loan facility incurred by Hertz International Ltd. received payment in cash in full; •the holders of claims with respect to the unsecured Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and •the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate from the Petition Date to the date of payment (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest. All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of three percent of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either new 30-year public warrants (the " 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 Rights Offering as disclosed below. In accordance with the Plan of Reorganization, Hertz Global commenced a Rights Offering, under which eligible holders of Hertz Global's common stock and certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. Pursuant to the EPCA, certain parties agreed to purchase all unsubscribed shares in the Rights Offering (the "Backstop Parties"). The final expiration date for the Rights Offering occurred on June 15, 2021, with eligible holders subscribing to purchase 127,362,114 shares (approximately $1.3 billion), with the Backstop Parties to purchase the remaining 36,137,887 shares (approximately $361 million). Hertz Global closed the Rights Offering upon emergence from the Chapter 11 Cases on June 30, 2021. Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in the amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share). During the third quarter of 2021, the Company issued additional shares pursuant to the rounding provisions of the Rights Offering for cash proceeds of approximately $4 million at a purchase price of $10.00. On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock to Apollo and received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees. On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global entered into a public warrant agreement (the "Public Warrant Agreement") and issued 89,049,029 Public Warrants, subject to certain conditions. The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate. The Public Warrants had an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends, certain dilutive events, and recurring fair value adjustments ( See Note 13, "Fair Value Measurements."). See Note 10, "Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global," and Note 11, "Public Warrants – Hertz Global," for additional information on the new equity and Public Warrants issued upon the Company's Chapter 11 emergence. On the Effective Date, the reorganized Company entered into exit credit facilities 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 a senior secured revolving credit facility (the "First Lien RCF") in an aggregate committed amount of $1.3 billion. Additionally, the reorganized Company entered into a new ABS facility program ("HVF III") with an aggregate principal amount of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion. On the Effective Date, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization. See Note 6, "Debt," for additional information.Going Concern The accompanying unaudited condensed 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. During the Chapter 11 Cases, the Company’s ability to continue as a going concern was contingent upon the Company’s ability to successfully implement the Company’s Plan of Reorganization, among other factors. As a result of the implementation of the Plan of Reorganization, management believes there is no longer substantial doubt about the Company's ability to continue as a going concern.

Basis of Presentation and Recently Issued Accounting Pronouncements	9 Months Ended
	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Recently Issued Accounting Pronouncements	Basis of Presentation and Recently Issued Accounting Pronouncements Basis of Presentation This Quarterly Report on Form 10-Q combines the quarterly reports on Form 10-Q for the quarterly period ended September 30, 2021 of Hertz Global and Hertz. Hertz Global consolidates Hertz for financial statement purposes, therefore, disclosures that relate to activities of Hertz also apply to Hertz Global. In the sections that combine disclosure of Hertz Global and Hertz, this report refers to actions as being actions of the Company, or Hertz Global, which is appropriate because the business is one enterprise and Hertz Global operates the business through Hertz. When appropriate, Hertz Global and Hertz are named specifically for their individual disclosures and any significant differences between the operations and results of Hertz Global and Hertz are separately disclosed and explained. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The Company's vehicle rental operations are typically a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months for the majority of countries where the Company generates revenues. Effective on the Petition Date, the Company applied Accounting Standards Codification (“ASC”) 852, Reorganizations (“Topic 852”) which requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, pre-petition obligations of the Debtors that could be impacted by the Chapter 11 Cases were classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. These liabilities were reported at the amounts the Company anticipated would be allowed by the Bankruptcy Court, even if they could be settled for lesser amounts. See Note 17, "Liabilities Subject to Compromise," for additional information. In addition, certain charges related to the Chapter 11 Cases were recorded as reorganization items, net in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021 and the three and nine months ended September 30, 2020, respectively. See Note 18, "Reorganization Items, Net," for additional information. Under Topic 852, companies must apply “fresh-start” accounting rules upon emergence from Chapter 11 reorganization if certain conditions are met. The Company did not qualify for "fresh-start" accounting under Topic 852 upon emergence from Chapter 11. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates. The December 31, 2020 unaudited condensed consolidated balance sheet data is derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with information included in the Company's Form 10-K for the year ended December 31, 2020 (the "2020 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") on February 26, 2021. In connection with the Chapter 11 Emergence and how the Company's chief operating decision maker ("CODM") regularly reviews operating results and allocates resources, the Company modified its reportable segments during the second quarter of 2021, as disclosed in Note 16, "Segment Information." Certain prior period amounts have been reclassified to conform with current period presentation. Principles of Consolidation The unaudited condensed consolidated financial statements of Hertz Global include the accounts of Hertz Global, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The unaudited condensed consolidated financial statements of Hertz include the accounts of Hertz, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The Company consolidates a VIE when it is deemed the primary beneficiary of the VIE. The Company accounts for its investment in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary of the joint venture. All significant intercompany transactions have been eliminated in consolidation. Recently Issued Accounting Pronouncements Adopted Scope of Reference Rate Reform In January 2021, the Financial Accounting Standards Board ("FASB") issued guidance that clarifies that entities with derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment due to reference rate reform may elect to apply certain optional expedients and exceptions, including contract modification relief, provided in Topic 848. Entities may elect to apply the guidance on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 or (2) prospectively to new modifications from any date in an interim period that includes or is after January 7, 2021, up to the date that financial statements are available to be issued. The Company will apply the guidance prospectively, as applicable, and does not expect a material impact on its financial position, results of operations or cash flows.

Divestitures	9 Months Ended
Divestitures	Sep. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]
Divestitures	Divestitures Donlen Sale On March 30, 2021, the Company completed the previously announced Donlen Sale. The proceeds from the sale were subject to certain post-closing adjustments in the second quarter of 2021 based on the level of assumed indebtedness, working capital and fleet equity. In the nine months ended September 30, 2021, the Company recognized a pre-tax gain in its corporate operations of $400 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $891 million less $543 million net book value of assets sold plus a $53 million receivable in connection with the sale where cash proceeds were received in September 2021. On March 30, 2021, the Company and the buyer entered into a transition services agreement ("TSA") which provides for certain transitional services in connection with the Donlen Sale. Sale of Non-vehicle Capital Assets During the first quarter of 2020, the Company received additional cash from the sale of certain non-vehicle capital assets in its Americas Rental Car segment, which was completed in the fourth quarter of 2019, and recognized an additional $20 million pre-tax gain on the sale, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021. Sale of Marketable Securities During the first quarter of 2020, the Company sold marketable securities for $74 million and recognized an immaterial gain on the sale in its corporate operations, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the nine months ended September 30, 2020.

Revenue Earning Vehicles

9 Months Ended

Sep. 30, 2021

Revenue Earning Vehicles

The components of revenue earning vehicles, net are as follows:



(In millions)	September 30, 2021		December 31, 2020
Revenue earning vehicles	$	9,751	$	7,492
Less accumulated depreciation	(1,526)		(1,467)
	8,225		6,025
Revenue earning vehicles held for sale, net(1)	338		37
Revenue earning vehicles, net	$	8,563	$	6,062

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

Goodwill and Intangible Assets, Net	9 Months Ended
Goodwill and Intangible Assets, Net	Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets, Net	Goodwill and Intangible Assets, Net Recoverability of Goodwill and Indefinite-lived Intangible Assets The Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by ASC 350 – Intangibles, Goodwill and Other (“Topic 350”). As of March 31, 2021, the Company quantitatively tested the recoverability of its goodwill and indefinite-lived intangible assets in the International RAC segment due to continued adverse impacts from COVID-19 and the Company's reduction in cash flow projections. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million. As of June 30, 2021, the Company determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases, were materially consistent with the assumptions utilized in the Company’s March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, the Company concluded there were no indicators of impairment triggered for the Americas RAC or International RAC segments in the second quarter of 2021. As of September 30, 2021, the Company determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19 were materially consistent with the assumptions utilized in the Company’s March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, the Company concluded there were no indicators of impairment triggered for the Americas RAC or International RAC segments in the third quarter of 2021. Further deterioration in the general economic conditions in the travel industry, the Company’s cash flows and the Company's ability to obtain future financing to maintain its fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. The Company will continue to closely monitor actual results versus its expectations, market events or conditions, including the impact of COVID-19 on the Company's business and the travel industry, and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital. If the Company's expectations of the operating results, both in magnitude or timing, do not materialize, or if its weighted average cost of capital increases, the Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

Debt

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

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

Facility

Weighted-Average Interest Rate
as of
September 30, 2021

Fixed or
Floating
Interest
Rate

Maturity

September 30,
2021

December 31,
2020

Non-Vehicle Debt

Term B Loan

4.00%

Floating

6/2028

1,297

—

Term C Loan

4.00%

Floating

6/2028

245

—

First Lien RCF

N/A

Floating

6/2026

—

Other Non-Vehicle Debt

8.53%

Fixed

Various

Senior Secured Superpriority Debtor-in-Possession Credit Agreement

N/A

—

250

Unamortized Debt Issuance Costs and Net (Discount) Premium

(45)

(25)

Total Non-Vehicle Debt Not Subject to Compromise

1,511

243

Non-Vehicle Debt Subject to Compromise

Senior Term Loan

N/A

—

656

Senior RCF

N/A

—

615

Senior Notes(1)

N/A

—

2,700

Senior Second Priority Secured Notes

N/A

—

350

Promissory Notes

N/A

—



Facility	Weighted-Average Interest Rate as of September 30, 2021	Fixed or Floating Interest Rate	Maturity	September 30, 2021	December 31, 2020
Alternative Letter of Credit Facility(2)	N/A	N/A	N/A	—	114
Senior RCF Letter of Credit Facility	N/A	N/A	N/A	—	17

Unamortized Debt Issuance Costs and Net (Discount) Premium				—	(36)
Total Non-Vehicle Debt Subject to Compromise				—	4,443
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A(3)	1.63%	Floating	06/2023	2,270	—

				2,270	—
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(3)	1.66%	Fixed	12/2024	2,000	—
HVF III Series 2021-2(3)	2.12%	Fixed	12/2026	2,000	—
				4,000	—
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(4)	N/A	N/A	N/A	—	1,940
				—	1,940
HVF II U.S. Vehicle Medium Term Notes

HVF II Series 2015-3	N/A	N/A	N/A	—	163
HVF II Series 2016-2	N/A	N/A	N/A	—	263
HVF II Series 2016-4	N/A	N/A	N/A	—	187
HVF II Series 2017-1	N/A	N/A	N/A	—	199
HVF II Series 2017-2	N/A	N/A	N/A	—	164
HVF II Series 2018-1	N/A	N/A	N/A	—	468
HVF II Series 2018-2	N/A	N/A	N/A	—	94
HVF II Series 2018-3	N/A	N/A	N/A	—	95
HVF II Series 2019-1	N/A	N/A	N/A	—	330
HVF II Series 2019-2	N/A	N/A	N/A	—	354
HVF II Series 2019-3	N/A	N/A	N/A	—	352
				—	2,669













Vehicle Debt - Other

European Vehicle Notes(5)	N/A	N/A	N/A	—	888
European ABS(3)	2.50%	Floating	4/2022	401	263
Hertz Canadian Securitization(3)	2.44%	Floating	1/2023	206	53

Australian Securitization(3)	1.66%	Floating	4/2022	112	97
New Zealand RCF	3.13%	Floating	6/2022	37	35
U.K. Financing Facility	3.59%	Floating	10/2021-8/2024	111	105
U.K. Toyota Financing Facility	2.20%	Floating	10/2021-3/2022	13	—
Other Vehicle Debt	2.90%	Floating	10/2021-11/2024	91	37
				971	1,478



Facility	Weighted-Average Interest Rate as of September 30, 2021	Fixed or Floating Interest Rate	Maturity	September 30, 2021		December 31, 2020
Unamortized Debt Issuance Costs and Net (Discount) Premium				(34)		(63)




Total Vehicle Debt Not Subject to Compromise				7,207		6,024
Total Debt Not Subject to Compromise				$	8,718	$	6,267

(1)References to the "Senior Notes" include 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 unaudited condensed consolidated balance sheets as of December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, the Senior Notes were repaid in full and terminated. On July 1, 2021, Wells Fargo Bank, National Association as indenture trustee for the Senior Notes, filed a complaint against Hertz and certain of its subsidiaries requesting declaratory judgement that additional amounts are owed with respect to certain premiums and post-petition interest with respect to the Senior Notes. Hertz disputes that any such amounts are owed and on August 2, 2021 filed a motion to dismiss the complaint. See Note 14, "Contingencies and Off-Balance Sheet Commitments" for additional information.


(In millions)	Outstanding Principal

Senior Notes	September 30, 2021		December 31, 2020
6.250% Senior Notes due October 2022	$	—	$	500
5.500% Senior Notes due October 2024	—		800
7.125% Senior Notes due August 2026	—		500
6.000% Senior Notes due January 2028	—		900
	$	—	$	2,700

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

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

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

(5)References to the "European Vehicle Notes" include the series of Hertz Holdings Netherlands B.V.'s, an indirect wholly-owned subsidiary of Hertz organized under the laws of the Netherlands, ("Hertz Netherlands") unsecured senior notes (converted from Euros to U.S. Dollars at a rate of 1.22 to 1 as of December 31, 2020), set forth in the table below. On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were repaid in full and cancelled.


(In millions)	Outstanding Principal

European Vehicle Notes	September 30, 2021		December 31, 2020
4.125% Senior Notes due October 2021	$	—	$	276
5.500% Senior Notes due March 2023	—		612
	$	—	$	888

Chapter 11 and Emergence

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

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility. Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited ("HIL"), Hertz Netherlands and the direct and indirect subsidiary companies located outside of the United States and Canada (collectively the "International Subsidiaries"), some of which were waived

or amended subject to certain time limitations, and (ii) HVF, HVF II and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").

As disclosed in Note 1, "Background," on May 14, 2021, the Debtors filed the Plan of Reorganization with the Bankruptcy Court, which was confirmed by the Bankruptcy Court on June 10, 2021. On the Effective Date, the Company emerged from Chapter 11 as disclosed in Note 1, "Background" and, in accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program and the HVIF U.S. ABS Program were repaid in full and cancelled, as further disclosed below. Upon the Debtor's emergence from Chapter 11 and the associated debt payoffs, any events of default, termination and/or amortization events ceased to exist.

Non-Vehicle Debt

First Lien Credit Agreement

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

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

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

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

Proceeds received on the Effective Date, as a result of the Plan of Reorganization, under the First Lien Credit Agreement were used to (i) repay certain existing indebtedness of the Debtors; (ii) pay fees, expenses and costs associated with the consummation of the Plan of Reorganization; (iii) fund distributions required in connection with the Plan of Reorganization; (iv) provide funds for working capital and general corporate purposes; and (v) backstop or replace existing letters of credit.

Term B Loan and Term C Loan (collectively, the "Term Loans"): The Term Loans bear interest based on an alternate base rate as per the First Lien Credit Agreement or adjusted LIBOR, in each case plus an initial applicable margin of (i) 2.50% in the case of the alternate base rate, or (ii) 3.50% in the case of the adjusted LIBOR. In each case, the margin may decrease depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio"). The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $3.3 million per quarter beginning on September 30, 2021 until maturity. The Term Loans mature on June 30, 2028.

First Lien RCF: The First Lien RCF bears interest, at a benchmark rate plus spread. Loans under the facility are available in various currencies including USD, Eurodollar, Australian dollar, Canadian dollar and Sterling. Benchmark rates for the relevant currencies include, the relevant LIBOR rate, the Prime rate, the Bank Bill Swap Reference Bid Rate for Australian dollars, Canadian prime rate, an adjusted Canadian Dollar Offered Rate ("CDOR") or the Daily Simple Sterling Overnight Index Average ("SONIA"). ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50%. The margin for Eurocurency Loans (including USD loans), SONIA loans and Canadian dollar BA Equivalent Loans, as defined in the First Lien Credit Agreement, is dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement. As of September 30, 2021, that margin was 3.50%. In each case, the margin may decrease depending on Hertz’s Total Corporate Leverage Ratio. The First Lien Credit Agreement requires the First Lien RCF to be repaid in quarterly installments beginning on September 30, 2021 until maturity. The First Lien RCF matures on June 30, 2026.

Senior Secured Superpriority Debtor-in-Possession Credit Agreement ("DIP Credit Agreement")

On the Effective Date, in accordance with the Plan of Reorganization, the DIP Credit Agreement was paid in full and terminated.

Senior Facilities

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

Senior Notes and Senior Second Priority Secured Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Company's Senior Notes and Senior Second Priority Secured Notes were paid in full and terminated.

Promissory Notes

On the Effective Date, in accordance with the Plan of Reorganization, the Promissory Notes were paid in full and terminated.

Alternative Letter of Credit Facility

On the Effective Date, in accordance with the Plan of Reorganization, the Alternative Letter of Credit Facility was paid in full and terminated.

HIL Credit Agreement

In April 2021, Hertz International Limited ("HIL") entered into a multi-draw term loan facility (the "HIL Credit Agreement") which provided an aggregate maximum principal of €250 million to meet the liquidity requirements of the European business.

In May 2021, resulting from a change in the Company's plan of reorganization sponsorship, the HIL Credit Agreement was terminated and HIL entered into a new multi-draw term loan facility (the "Second HIL Credit Agreement") which also provided for an aggregate maximum principal of €257 million that was funded by certain of the Plan Sponsors. On the Effective Date, in accordance with the Plan of Reorganization, the Second HIL Credit Agreement was paid in full and terminated.

Vehicle Debt

HVF III U.S. ABS Program

In June 2021, Hertz established a securitization platform, the HVF III U.S. ABS Program, to facilitate its financing activities relating to vehicles used by Hertz in the U.S. daily vehicle rental operations. Hertz Vehicle Financing III LLC ("HVF III"), a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF III U.S. ABS Program. HVF III has entered into a base indenture that permits it to issue term and variable funding rental car asset-backed securities, secured by a collateral pool consisting primarily of the rental vehicles used in the Company's U.S. vehicle rental operations and the related incentive and repurchase program vehicle receivables. Within each series of HVF III U.S. Vehicle Medium Term Notes, the issued notes are subordinated based on class.

Pursuant to the Plan of Reorganization, in June 2021, HVF III issued Series 2021-A Variable Funding Rental Car Asset Backed Notes (the "Series 2021-A Notes"), the Series 2021-1 Fixed Rate Rental Car Asset Backed Notes

(the "Series 2021-1 Notes") and the Series 2021-2 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-2 Notes" and, together with the Series 2021-A Notes and the Series 2021-1 Notes, the “HVF III ABS Notes”).

HVF III Series 2021-A Notes: In June 2021, Hertz issued the Series 2021-A Notes with a maximum principal amount of up to $2.8 billion and a maturity date of June 2023.

HVF III Series 2021-1 Notes: On the Effective Date, Hertz issued the Series 2021-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $2.0 billion. There is subordination within the Series 2021-1 Notes based on class.

HVF III Series 2021-2 Notes: On the Effective Date, Hertz issued the Series 2021-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $2.0 billion. There is subordination within the Series 2021-2 Notes based on class.

In June 2021, in connection with the issuance of the HVF III ABS Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.

Proceeds received upon issuance from the HVF III ABS Notes were used to fund the purchases of certain vehicles and for the repayment in full of (i) approximately $3.5 billion in aggregate outstanding principal of notes issued by HVF II, as described below, and (ii) approximately $2.2 billion in aggregate outstanding principal of notes issued by Hertz Vehicle Interim Financing, a direct wholly-owned bankruptcy remote subsidiary of Hertz ("HVIF"). The manufacturer rebates associated with HVF and HVIF were transferred to HVF III as part of the purchase agreements with HVF and HVIF. Any remaining funds are expected to be used for the future purchase or refinancing of vehicles to be leased under the Operating Lease.

HVF II U.S. ABS Program

On the Effective Date, in accordance with the Plan of Reorganization, all HVF II U.S. Vehicle Medium Term Notes and HVF II Variable Funding Notes were paid in full and terminated. Any and all outstanding Bankruptcy Court orders and other agreements relating to HVF II were terminated on the Effective Date as a result of the termination of the notes.

HVIF U.S. ABS Program

On the Effective Date, in accordance with the Plan of Reorganization, the HVIF Series 2020-1 was paid in full and terminated.

Vehicle Debt-Other

European Vehicle Notes

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

European ABS

In April 2021, International Fleet Financing No. 2 BV ("IFF No. 2") entered into a comprehensive restructuring of the European ABS. The terms of the restructured European ABS provide for aggregate maximum borrowings of €450 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, the guarantees provided by Hertz relating to the restructured European ABS, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

Hertz Canadian Securitization

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 which provides for aggregate maximum borrowings of CAD$350 million on a revolving basis. Subject to initial availability, the initial draw of CAD$120 million was used, in part, to pay the outstanding obligations under the Funding LP Series 2015-A Notes, including any unpaid default interest. As a result of the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.

Australian Securitization

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 has been superseded by an amendment of the Australian Securitization. The terms of the amended Australian Securitization provide for aggregate maximum borrowings of AUD$210 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, the guarantees provided by Hertz relating to the restructured Australian Securitization, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

New Zealand RCF

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.

U.K. Financing Facility

Events of default that would have arisen under the U.K. 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 have been superseded by a comprehensive restructuring of the U.K. Financing Facility. The terms of the restructured U.K. Financing Facility provide for aggregate maximum borrowings of £100 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, guarantees provided by Hertz relating to the restructured U.K. Financing Facility, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.

U.K. Toyota Financing Facility

In May 2021, Hertz U.K. Limited entered into the U.K. Toyota Financing Facility to finance the acquisition of certain motor vehicles which provides for aggregate maximum borrowings of £10 million maturing in December 2021.

Maturities

As of September 30, 2021, the nominal amounts of maturities of debt for each of the years ending December 31 are as follows:


(In millions)	2021		2022		2023		2024		2025		After 2025
Non-Vehicle Debt	$	5	$	19	$	18	$	14	$	13	$	1,487
Vehicle Debt	34		680		2,506		2,021		—		2,000
Total	$	39	$	699	$	2,524	$	2,035	$	13	$	3,487

As of September 30, 2021, $19 million of non-vehicle debt and $683 million of vehicle debt is set to mature during the twelve months following the issuance of this Quarterly Report on Form 10-Q.

Loss on Extinguishment of Debt

The Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements. Loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the table below, in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021.

The following table reflects the amount of loss for each respective redemption/termination:



	Three Months Ended September 30,				Nine Months Ended September 30,
Redemption/Termination (in millions)	2021		2020		2021		2020
Non-Vehicle Debt
HIL Credit Agreement(1)	$	—	$	—	$	8	$	—
Second HIL Credit Agreement	—		—		5		—

Total Non-Vehicle Debt	—		—		13		—
Non-Vehicle Debt (subject to compromise)
Senior Term Loan	—		—		16		—
Senior RCF	—		—		22		—
Senior Notes	—		—		29		—
Senior Second Priority Secured Notes	—		—		4		—
Promissory Notes	—		—		2		—
Alternative Letter of Credit Facility	—		—		7		—

Letter of Credit Facility	—		—		8		—
Total Non-Vehicle Debt (subject to compromise)	—		—		88		—
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes	—		—		9		—
HVF II U.S. Vehicle Medium Term Notes	—		—		39		—
HVIF Series 2020-1	—		—		21		—
European Vehicle Notes	—		—		29		—
European ABS(2)	—		2		—		5
Total Vehicle Debt	—		2		98		5
Total Loss on Extinguishment of Debt	$	—	$	2	$	199	$	5

(1) The loss on extinguishment associated with the HIL Credit Agreement is recorded in non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021.

(2) The loss on extinguishment associated with the European ABS is recorded in vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and nine ended September 30, 2020.

Borrowing Capacity and Availability

Borrowing capacity and availability comes from the Company's revolving credit facilities, which are a combination of variable funding asset-backed securitization facilities, cash-flow-based revolving credit facilities, asset-based revolving credit facilities and the First Lien RCF. Creditors under each such asset-backed securitization facility and asset-based revolving credit facility have a claim on a specific pool of assets as collateral. With respect to each such asset-backed securitization facility and asset-based revolving credit facility, the Company refers to the amount of debt it can borrow given a certain pool of assets as the borrowing base.

The Company refers to "Remaining Capacity" as the maximum principal amount of debt permitted to be outstanding under the respective facility (i.e., with respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the amount of debt the Company could borrow assuming it possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under such facility and, in the case of the First Lien RCF, less any issued standby letters of credit. With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding under such facility (i.e., the amount of debt that can be borrowed given the collateral possessed at such time).

The following facilities were available to the Company as of September 30, 2021 and are presented net of any outstanding letters of credit:



(In millions)	Remaining Capacity		Availability Under Borrowing Base Limitation
Non-Vehicle Debt


First Lien RCF	$	1,144	$	1,144
Total Non-Vehicle Debt	1,144		1,144
Vehicle Debt
HVF III Series 2021-A	543		—

European ABS	125		—
Hertz Canadian Securitization	69		—
Australian Securitization	40		—
New Zealand RCF	5		—
U.K. Financing Facility	24		—
U.K. Toyota Financing Facility	1		—
Total Vehicle Debt	807		—
Total	$	1,951	$	1,144

Letters of Credit

On the Effective Date, in accordance with the Plan of Reorganization, drawn letters of credit under the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility were paid in full and terminated. To the extent any of the related issued letters of credit remained outstanding as of the Effective Date, certain of these letters of credit were deemed to be issued under the First Lien RCF. For the remainder, the Company provided cash collateral to backstop these obligations.

As of September 30, 2021, there were outstanding standby letters of credit totaling $366 million comprised primarily of $238 million issued under the Term C Loan and $111 million were issued under the First Lien RCF as discussed above. As of September 30, 2021, there remains $7 million of remaining capacity to issue letters of credit under the Term C Loan. Such letters of credit have been issued primarily to support the Company's insurance programs, vehicle rental concessions and leaseholds as well as to provide credit enhancement for its asset-backed securitization facilities. As of September 30, 2021, none of the issued letters of credit have been drawn upon.

Pledges Related to Vehicle Financing

Substantially all of the Company's revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings or asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC and various other domestic and international subsidiaries that facilitate the Company's international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

The Company has a 25% ownership interest in IFF No. 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. IFF No. 2 is a VIE and the Company is the primary beneficiary; therefore, the assets, liabilities and results of operations of IFF No. 2 are included in the accompanying unaudited condensed consolidated financial statements. As of September 30, 2021 and December 31, 2020, IFF No. 2 had total assets of

$719 million and $464 million, respectively, comprised primarily of loans receivable, and total liabilities of $719 million and $464 million, respectively, comprised primarily of debt.

Covenant Compliance

The First Lien Credit Agreement requires Hertz to comply with the following financial covenants: (i) until the expiration of the Relief Period, as defined in the First Lien Credit Agreement, a minimum liquidity of $500 million in the first and last quarters of the calendar year and $400 million in the second and third quarters of the calendar year; and (ii) subsequent to the expiration of the Relief Period, a consolidated first lien leverage ratio (the "First Lien Ratio") of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year. Both of the financial covenants disclosed above are effective beginning in the third quarter of 2021. As of September 30, 2021, Hertz was in compliance with the First Lien Ratio.

In addition to financial covenants, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments. As of September 30, 2021, the Company was in compliance with all covenants in the First Lien Credit Agreement.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Restructuring and Related Activities [Abstract]

Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

The Company enters into certain agreements as a lessor under which it rents vehicles and leases fleets to customers.

The Company's operating leases for vehicle rentals have rental periods that are typically short term (e.g., daily or weekly) and can generally be extended for up to one month or terminated at the customer's discretion. Rental charges are computed on a limited or unlimited mileage rate, or on a time rate plus a mileage charge. In connection with the vehicle rental, the Company offers supplemental equipment rentals (e.g., child seats and ski racks) which are deemed lease components. 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. 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. 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.

Prior to the Donlen Sale on March 30, 2021, as further disclosed in Note 3, "Divestitures," the Company had operating leases for fleets as part of its Donlen business which had lease periods that were typically for twelve months, after which the lease converted to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter. These leases contained terminal rental adjustment clauses which were considered variable charges.

Prior to the Effective Date, the Bankruptcy Court entered orders rejecting certain of the Company's real property leases under Section 365 of the Bankruptcy Code (the "Lease Rejection Orders"). The Lease Rejection Orders applied, in the aggregate, to 278 off airport and 34 airport locations in the Company's Americas RAC segment.

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying unaudited condensed consolidated statements of operations:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Operating lease income from vehicle rentals	$	2,122	$	1,037	$	5,018	$	3,278
Operating lease income from fleet leasing	—		155		149		485
Variable operating lease income	47		—		87		34
Revenue accounted for under Topic 842	2,169		1,192		5,254		3,797
Revenue accounted for under Topic 606	57		76		133		226
Total revenues	$	2,226	$	1,268	$	5,387	$	4,023

Leases

The Company enters into certain agreements as a lessor under which it rents vehicles and leases fleets to customers.

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying unaudited condensed consolidated statements of operations:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Operating lease income from vehicle rentals	$	2,122	$	1,037	$	5,018	$	3,278
Operating lease income from fleet leasing	—		155		149		485
Variable operating lease income	47		—		87		34
Revenue accounted for under Topic 842	2,169		1,192		5,254		3,797
Revenue accounted for under Topic 606	57		76		133		226
Total revenues	$	2,226	$	1,268	$	5,387	$	4,023

Restructuring

9 Months Ended

Sep. 30, 2021

Restructuring

Europe Restructuring

Due to the continued impact from COVID-19 as disclosed in Note 1, "Background," and reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment. The total employees affected for the nine months ended September 30, 2021 was approximately 700 employees. The program is expected to be completed within the next twelve months.

U.S. Restructuring

Due to the impact from COVID-19 as disclosed in Note 1, "Background," the Company initiated a restructuring program, beginning in April 2020, affecting approximately 11,000 U.S. employees in its Americas Rental Car segment and corporate operations. This program was substantially completed in the third quarter of 2020.

Restructuring Charges

Restructuring charges under these programs were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
By Type:
Termination benefits	$	7	$	—	$	19	$	37
Lease and contract terminations	—		—		3		—
Facility closures	—		—		1		—

Total	$	7	$	—	$	23	$	37



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
By Caption:
Direct vehicle and operating	$	2	$	—	$	10	$	25
Selling, general and administrative	5		—		13		12
Total	$	7	$	—	$	23	$	37



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
By Segment:
Americas Rental Car segment	$	—	$	—	$	—	$	34
International Rental Car segment	7		—		23		—

Corporate operations	—		—		—		3
Total	$	7	$	—	$	23	$	37

The following table summarizes the activity during the nine months ended September 30, 2021, affecting the restructuring accrual, which is recorded in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.


(In millions)	Termination Benefits		Other		Total
Balance as of December 31, 2020(1)	$	—	$	—	$	—
Reclassified from liabilities subject to compromise	7		—		7
Charges incurred	19		4		23
Cash payments	(20)		—		(20)
Other non-cash reductions	—		(2)		(2)





Balance as of September 30, 2021	$	6	$	2	$	8

(1) As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company classified $7 million of restructuring charges as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020, which were reinstated to accrued liabilities as of June 30, 2021. See Note 17, "Liabilities Subject to Compromise."

Income Tax (Provision) Benefit	9 Months Ended
Income Tax (Provision) Benefit	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income Tax (Provision) Benefit	Income Tax (Provision) Benefit Hertz Global The effective tax rate is 21% and 14% for the three months ended September 30, 2021 and 2020, respectively. Hertz Global recorded a tax provision of $160 million and a tax benefit of $36 million for the three months ended September 30, 2021 and 2020, respectively. The increase in the three months ended September 30, 2021 compared to 2020 is driven by improvements in Hertz Global's financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized. The effective tax rate is 23% and 14% for the nine months ended September 30, 2021 and 2020, respectively. Hertz Global recorded a tax provision of $193 million and a tax benefit of $232 million for the nine months ended September 30, 2021 and 2020, respectively. The increases in the effective tax rate and tax expense for the nine months ended September 30, 2021 are driven by improvements in Hertz Global's financial performance, changes in the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized, tax benefits of the European restructuring, reduced by the non-deductible bankruptcy transaction costs, and the absence of recording valuation allowances on historical foreign deferred tax assets in 2020. Hertz The effective tax rate is 21% and 14% for the three months ended September 30, 2021 and 2020, respectively. Hertz recorded a tax provision of $156 million and a tax benefit of $36 million for the three months ended September 30, 2021 and 2020, respectively. The increase in the tax provision in the three months ended September 30, 2021 compared to 2020 is driven by improvements in Hertz's financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized.The effective tax rate is 20% and 14% for the nine months ended September 30, 2021 and 2020, respectively. Hertz recorded a tax provision of $189 million for the nine months ended September 30, 2021 compared to a tax benefit of $259 million for the nine months ended September 30, 2020. The tax provision increase for the nine months ended September 30, 2021 compared to 2020 is driven by improvements in Hertz's financial performance, tax benefits of the European restructuring reduced by the non-deductible bankruptcy transaction costs and the absence of recording valuation allowances on historical foreign deferred tax assets in 2020.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Emergence from Bankruptcy

In connection with the Chapter 11 Emergence, all of Hertz Global's existing authorized, issued, and outstanding common and preferred stock were cancelled. As of the Effective Date, there are 1,000,000,000 shares of reorganized Hertz Global common stock authorized for issuance. On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock as follows:

•277,119,438 shares purchased by the Plan Sponsors;

•14,133,024 shares issued, pro rata, to existing shareholders;

•127,362,114 shares issued pursuant to the Rights Offering; and

•52,487,886 shares distributed to the Backstop Parties.

As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding. The parties, including the Plan Sponsors who purchased reorganized Hertz Global common stock and preferred stock (collectively, the "Equity Commitment Parties"), the subscribers to the Rights Offering, and the Backstop Parties purchased an aggregate of (i) $4.7 billion of reorganized Hertz Global common stock and (ii) $1.5 billion (less a 2% upfront discount and stock issuance fees) of reorganized Hertz Global preferred stock as described below. The excess par value for the common stock shares issued by reorganized Hertz Global was recorded to additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global.

Common Stock

Under reorganized Hertz Global's revised articles of incorporation, 1,000,000,000 shares of reorganized Hertz Global common stock have been authorized for issuance where each share has a par value of $0.01 and represents one vote on matters presented to the voting shareholders of reorganized Hertz Global. The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global as of September 30, 2021. The reorganized Hertz Global common stock is not convertible and does not accrue dividends. Dividends, if any, are paid only upon a valid declaration by the board of directors 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.

Rights Offering

In accordance with the Plan of Reorganization, approximately 35% of reorganized Hertz Global common stock was offered pursuant to the Rights Offering for an aggregate purchase price of $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. The Rights Offering subscription was first made available to eligible existing Hertz Global shareholders ("Eligible Existing Shareholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed and funded by Eligible Existing Shareholders, 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 Rights Offering occurred on June 15, 2021. Hertz Global closed the offering upon emergence from the Chapter 11 Cases on June 30, 2021 with Eligible Existing Shareholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $1.3 billion. The unsubscribed portion of the Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $361 million. The Backstop Parties were compensated a backstop fee of $164 million in reorganized Hertz Global common stock valued at $10.00 per share which is included in the Rights Offering totals in the accompanying unaudited condensed consolidated Statement of Changes in Mezzanine Equity and Stockholders' Equity. During the third quarter of 2021, the Company issued additional shares pursuant to the rounding provisions of the Rights Offering for cash proceeds of approximately $4 million at a purchase price of $10.00.

Public Warrants

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 89,049,029 Public Warrants. During the three months ended September 30, 2021, 153,299 Public Warrants were exercised of which 86,732 were cashless exercises and 66,567 were exercised for $13.80 per share. See Note 11, "Public Warrants – Hertz Global," for attributes of the Public Warrants, which are classified as a liability for financial reporting purposes.

Mezzanine Equity – Preferred Stock

In accordance with the revised articles of incorporation of reorganized Hertz Global, 100,000,000 shares of preferred stock, par value $0.01 per share, have been authorized for issuance. In connection with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of Series A preferred stock ("Series A Preferred Stock"), 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 it or its affiliates, for $1.5 billion, less a 2% upfront discount and stock issuance fees. The shares have no voting rights except that the affirmative vote or consent of the holders of a majority of the shares of Series A Preferred Stock will be necessary for effecting certain actions, including any amendment of the Certificate of Incorporation or Bylaws in a manner that adversely affects the rights, preferences and privileges of the New Preferred Stock; liquidation, dissolution or winding up of the reorganized Company or its business and affairs; the creation, authorization or issuance of any class or series of capital stock other than the reorganized Hertz Global common stock; issuance of additional shares of reorganized Hertz Global preferred stock; affiliate transactions, restricted payments; mergers or other business combinations; asset sales, indebtedness and investments. The holders of the shares are protected from certain events, including the dilutive issuance of additional preferred shares and securities convertible to equity of reorganized Hertz Global.

At the Company's discretion, it may redeem some or all of the outstanding shares of the Series A Preferred Stock for cash at the redemption price on the applicable redemption date (equal to the greater of (x) 100.0% of the then current accrued stated value of the shares being redeemed and (y) the amount necessary, if any, to result in a multiple on invested capital of 1.30x with respect to the shares being redeemed). As no one person or entity controls the voting stock of reorganized Hertz Global, a potential change-in-control action could be outside the Company's control and result in a non-compliance event, which could then result in a mandatory redemption of all outstanding shares of Series A Preferred Stock. Accordingly, the Series A Preferred Stock is classified as mezzanine equity and was recorded at its redemption amount upon issuance. As of September 30, 2021, the Company concluded a mandatory redemption is not probable and as such, the preferred stock is not currently redeemable or probable of becoming redeemable.

The Series A Preferred Stock shares have a liquidation preference that ranks senior to any other class or series of equity issued by reorganized Hertz Global. In the event of a voluntary or involuntary liquidation of Hertz Global, the holders of its Series A Preferred Stock would be entitled to receive a liquidation preference equal to the redemption price as of the date of such voluntary or involuntary liquidation. Pursuant to the certificate of designations for the Series A Preferred Stock, Hertz Global may 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 1.30 times the $1,000 per share liquidation preference. As per the terms of the First Lien Credit Agreement, the Company is precluded from making cash payments, including dividends, to the preferred shareholders prior to June 30, 2023.

Shares of the Series A Preferred Stock accrue dividends payable in cash semi-annually in arrears, at a rate of 9% per annum prior to June 30, 2023 and generally increasing thereafter. The first cash dividend payment is payable on the six-month anniversary of the Effective Date. If not paid in cash when due, the dividend accrual will increase the value of the Series A Preferred Stock as well as future dividend obligations as a result of compounding. As of September 30, 2021, the Company had $34 million of accumulated undeclared dividends for outstanding Series A Preferred Stock which are calculated on the basis of a 365 day year. Holders of the Series A Preferred Stock have certain dividend rights that provide priority over the dividend rights of holders of reorganized Hertz Global common stock. The Series A Preferred Shares do not participate in any additional dividends, including any dividends that may be paid on the common stock of reorganized Hertz Global. In general, the holders of the Series A Preferred Stock are entitled to an overall return of approximately 30% their investment.

Registration Status of Common Stock and Series A Preferred Stock

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 Rights Offering, the common stock and the Public Warrants issued by the reorganized Hertz Global pursuant to the Plan of Reorganization were issued under an exemption from the registration requirements of the Securities Act under the Bankruptcy Code. Shares of reorganized Hertz Global common stock issued to the Backstop Parties, the direct investment commitment under the EPCA, the Rights Offering and the Series A Preferred Stock were issued under Section 4(a)(2) of the Securities Act.

Open Market Sale Agreement

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into an open market sale agreement under which it could offer and sell from time to time shares of its common stock, par value $0.01 per share, having an aggregate offering price of up to $500 million ("ATM Program"). Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ATM Program for net proceeds of approximately $28 million, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, all shares that had been issued under the ATM Program were cancelled. Additionally, on the Effective Date, Hertz Global contributed the $28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz as of September 30, 2021.

Computation of Earnings (Loss) Per Common Share

Basic earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding. Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, except when the effect would be anti-dilutive. For the three and nine months ended September 30, 2021, the diluted weighted-average shares outstanding include the dilutive impact of Public Warrants where the Company assumes 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.

Due to the features and rights of the Series A Preferred Stock as described above, dividends earned by the holders of the Series A Preferred Stock, irrespective of whether paid or declared, represent earnings that are not available to the holders of Hertz Global's common stock when computing basic and diluted earnings (loss) per common share.

The following table sets forth the computation of basic and diluted earnings (loss) per common share:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Hertz Global	$	605	$	(222)	$	626	$	(1,425)
Series A Preferred Stock(1)	(34)		—		(34)		—
Net income (loss) available to Hertz Global common stockholders, basic	571		(222)		592		(1,425)
Change in fair value of Public Warrants	(16)		—		(16)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	555	$	(222)	$	576	$	(1,425)
Denominator:


Basic weighted-average common shares outstanding	471		156		264		148

Dilutive effect of Public Warrants	19		—		6		—
Diluted weighted-average shares outstanding	490		156		270		148
Antidilutive stock options, RSUs, PSUs and PSAs	—		2		—		2

Earnings (loss) per common share:
Basic	$	1.21	$	(1.42)	$	2.25	$	(9.65)
Diluted	$	1.13	$	(1.42)	$	2.14	$	(9.65)

(1)Undeclared dividends on each share of Series A Preferred Stock are accumulated at a current rate of 9% per annum, on the basis of a 365 day year.

Under the Plan of Reorganization approved by the Bankruptcy Court, the Rights Offering subscription was made available to Eligible Existing Shareholders on a pro rata basis to their existing common stock interests; therefore earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date.

Public Warrants – Hertz Global

On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $13.80 per Public Warrant, subject to certain conditions. The Public Warrants allow the holders to purchase up to 18% of the aggregate number of reorganized Hertz Global common interests issued and outstanding as of the Effective Date. Each Public Warrant will entitle the holders to receive one share of reorganized Hertz Global common stock. The Public Warrants have a thirty-year term and are exercisable from the date of issuance until June 30, 2051, at which time any unexercised Public Warrants will expire, and the rights of the holders to purchase reorganized Hertz Global common stock will terminate. The exercise price of the Public Warrants is subject to adjustment from time to time upon any payment of cash dividends relating to reorganized Hertz Global's common stock and the occurrence of certain dilutive events as described in the Public Warrant Agreement. During the three months ended September 30, 2021, 153,299 Public Warrants were exercised of which 86,732 were cashless exercises and 66,567 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. The Public Warrants trade on the over-the-counter market under the symbol HTZZW.

The Company accounts for the Public Warrants in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity, under which the Public Warrants meet the definition of a freestanding financial instrument. Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions that

are only applicable in the event of change of control (as defined by the Public Warrant Agreement). The Public Warrants are recorded at fair value in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2021. See Note 13, "Fair Value Measurements."

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Warrants and Rights Note Disclosure [Abstract]

Public Warrants – Hertz Global

9 Months Ended

Sep. 30, 2021

Public Warrants – Hertz Global

Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global

Emergence from Bankruptcy

•277,119,438 shares purchased by the Plan Sponsors;

•14,133,024 shares issued, pro rata, to existing shareholders;

•127,362,114 shares issued pursuant to the Rights Offering; and

•52,487,886 shares distributed to the Backstop Parties.

Common Stock

Rights Offering

Public Warrants

Mezzanine Equity – Preferred Stock

Registration Status of Common Stock and Series A Preferred Stock

Open Market Sale Agreement

Computation of Earnings (Loss) Per Common Share

The following table sets forth the computation of basic and diluted earnings (loss) per common share:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2021		2020		2021		2020
Numerator:
Net income (loss) attributable to Hertz Global	$	605	$	(222)	$	626	$	(1,425)
Series A Preferred Stock(1)	(34)		—		(34)		—
Net income (loss) available to Hertz Global common stockholders, basic	571		(222)		592		(1,425)
Change in fair value of Public Warrants	(16)		—		(16)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	555	$	(222)	$	576	$	(1,425)
Denominator:


Basic weighted-average common shares outstanding	471		156		264		148

Dilutive effect of Public Warrants	19		—		6		—
Diluted weighted-average shares outstanding	490		156		270		148
Antidilutive stock options, RSUs, PSUs and PSAs	—		2		—		2

Earnings (loss) per common share:
Basic	$	1.21	$	(1.42)	$	2.25	$	(9.65)
Diluted	$	1.13	$	(1.42)	$	2.14	$	(9.65)

(1)Undeclared dividends on each share of Series A Preferred Stock are accumulated at a current rate of 9% per annum, on the basis of a 365 day year.

Public Warrants – Hertz Global

Stock-Based Compensation	9 Months Ended
Stock-Based Compensation	Sep. 30, 2021
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation Under the Company's 2016 Omnibus Incentive Plan (the "Omnibus Plan"), the Company issued stock options, performance awards (shares and units), restricted stock and restricted stock units (collectively, "Equity Awards") to key executives, employees and non-management directors. On the Effective Date, in accordance with the Plan of Reorganization, all existing common stock and outstanding Equity Awards were cancelled without any distribution, and the Omnibus Plan deemed to be cancelled. As a result of the Equity Award cancellation, the Company recognized $10 million related to the unrecognized portion of share-based compensation in reorganization expense in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021. See Note 18, "Reorganization Items, Net." Consistent with the Disclosure Statement, the reorganized Company anticipates the approval and implementation of a new management equity incentive plan (the “MEIP”). The MEIP will be effective in a reporting period subsequent to September 30, 2021, and as such, no compensation costs related to the MEIP have been recorded in the accompanying unaudited condensed consolidated income statements as of September 30, 2021. As of the filing of this Quarterly Report on Form 10-Q, the MEIP has not been established.

Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Under U.S. GAAP, entities are allowed to measure certain financial instruments and other items at fair value. The Company has not elected the fair value measurement option for any of its assets or liabilities that meet the criteria for this option. Irrespective of the fair value option previously described, U.S. 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.

Fair Value Disclosures

The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

Debt Obligations

The fair value of the debt facilities is 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). For the new debt facilities entered into by the reorganized Company on the Effective Date as disclosed in Note 6, "Debt," such facilities were recently negotiated in arms-length transactions in active markets. As such, the fair value inputs are categorized as Level 1 on U.S. GAAP's fair value hierarchy.



	September 30, 2021				December 31, 2020
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt(1)	$	1,556	$	1,560	$	4,747	$	3,382
Vehicle Debt	7,241		7,246		6,087		6,021
Total	$	8,797	$	8,806	$	10,834	$	9,403

(1)Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020. See Note 6, "Debt."

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Cash Equivalents and Restricted Cash Equivalents

The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts. The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e. Level 1 inputs).

The following table presents the Company's cash equivalents and restricted cash equivalents that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:



	September 30, 2021								December 31, 2020
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total


Cash equivalents and restricted cash equivalents	$	1,840	$	—	$	—	$	1,840	$	723	$	—	$	—	$	723

Public Warrants

Under the Plan of Reorganization, reorganized Hertz Global issued Public Warrants, which are classified as liabilities at fair value in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ("ASC 480"). See Note 11, "Public Warrants – Hertz Global," for further details. Upon issuance on the Effective Date, the initial fair value of the Public Warrants was $800 million which was computed using the Black-Scholes option pricing model using Level 2 inputs.

The following table presents the key inputs used in the fair value of the Public Warrants at issuance on the Effective Date, June 30, 2021:



	Inputs


Risk-free interest rate	2.1		%
Expected term	30 years
Expected volatility	57.5		%
Exercise price	$	13.80
Asset price	$	10.02

Subsequent to the issuance of the Public Warrants, the Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy. The Company's policy for recognizing transfers between fair value levels is at the end of the reporting period.

As of September 30, 2021, the fair value of the unexercised and outstanding Public Warrants was $783 million. The adjustment for the three and nine months ended September 30, 2021 was a gain of $16 million, respectively, and is recorded in Change in fair value of Public Warrants in the accompanying unaudited condensed consolidated statements of operations for Hertz Global for the three and nine months ended September 30, 2021.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Donlen Assets

At 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 unaudited

condensed consolidated balance sheet as of December 31, 2020 and were recorded at the lower of carrying value or fair value less any costs to sell. The Company completed the Donlen Sale on March 30, 2021. See Note 3, "Divestitures," for additional information.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Contingencies and Off-Balance Sheet Commitments	9 Months Ended
Contingencies and Off-Balance Sheet Commitments	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Contingencies and Off-Balance Sheet Commitments	Contingencies and Off-Balance Sheet Commitments Legal Proceedings Self-Insured Liabilities The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company. The obligation for self-insured liabilities on self-insured U.S. and international vehicles, as stated in the accompanying unaudited condensed consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. As of September 30, 2021 and December 31, 2020, the Company's liability recorded for self-insured liabilities is $470 million and $488 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions. The liability is subject to significant uncertainties. The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related state legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results. Loss Contingencies From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business, including claims by employees, former employees and governmental investigations. The Company has summarized below the most significant legal proceedings to which the Company was a party during the nine months ended September 30, 2021 or the period after September 30, 2021, but before the filing of this Quarterly Report on Form 10-Q. In re Hertz Global Holdings, Inc. Securities Litigation - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Old Hertz Holdings (as defined in the Company's 2020 Form 10-K) and certain of its officers as defendants and alleging violations of the federal securities laws. 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. 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. 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. 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). 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. On October 30, 2019, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit. The parties fully briefed the appeal and oral argument had been scheduled for June 19, 2020. As a result of the Company's bankruptcy, the appeal was stayed as to the Company, but the plaintiffs advocated that the appeal could proceed against the individual defendants. On October 13, 2020, the Third Circuit affirmed the District Court’s dismissal of the plaintiffs’ motion for relief against the individual defendants since the motion was not timely filed and the appeal as to the Company remained stayed. In February 2021, the parties participated in a bankruptcy-related mediation process and arrived at a tentative settlement wherein the Company would pay a $250,000 cash settlement. In return, the plaintiffs would voluntarily dismiss all claims in the underlying action with prejudice and withdraw the plaintiffs’ Proofs of Claim with prejudice. On March 12, 2021, the Bankruptcy Court approved the tentative settlement and the terms of the settlement have now been fully implemented. This matter is now closed. Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250% Unsecured Notes due 2022, (2) 5.500% Unsecured Notes due 2024, (3) 7.125% Unsecured Notes due 2026, and (4) 6.000% Unsecured Notes due 2028 issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation, Dollar Rent A Car, Inc., Dollar Thrifty Automotive Group, Inc., Donlen Corporation, DTG Operations, Inc., DTG Supply, LLC, Firefly Rent A Car LLC, Hertz Car Sales LLC, Hertz Global Services Corporation, Hertz Local Edition Corp., Hertz Local Edition Transporting, Inc., Hertz System, Inc., Hertz Technologies, Inc., Hertz Transporting, Inc., Rental Car Group Company, LLC, Smartz Vehicle Rental Corporation, Thrifty Car Sales, Inc., Thrifty, LLC, Thrifty Insurance Agency, Inc., Thrifty Rent A Car System, LLC, and TRAC Asia Pacific, Inc. (collectively referred to in this summary as “Defendants”). The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v. The Hertz Corporation, et al. pending in the United States Bankruptcy Court for the District of Delaware, Adv. Pro. No. 21-50995 (MFW). 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 $271,684,720 plus interest at the contractual default rate or in the alternative are entitled to payment post-petition interest at the applicable contractual rate that they assert totals $124,512,653 plus interest at the New York statutory rate. On July 2, 2021, Defendants were summoned to file a motion or answer to the Complaint within 30 days. On August 2, 2021, the Defendants filed a motion to dismiss both counts for declaratory judgment. Briefing on the motion is now complete and oral argument has been scheduled for November 9, 2021. The Defendants dispute that any such amounts are owed and intend to respond and otherwise vigorously defend claims set forth therein. The Company cannot predict the outcome or timing of this litigation. Additionally, some creditors in the Chapter 11 Cases may assert that the Company owes additional interest and, in certain cases, additional make whole or other premiums. These claims could be material. The Company retains all rights with respect to any such asserted amounts and intends to vigorously defend against any such asserted claims. There can be no assurance regarding the outcome of any of the litigation regarding the validity or, if deemed valid, the amount of any such additional asserted interest and make whole claims and as such, the Company cannot predict the outcome or timing of this litigation. The Company maintains an internal compliance program through which it from time to time identifies potential violations of laws and regulations applicable to the Company. When the Company identifies such matters, the Company conducts an internal investigation and otherwise cooperates with governmental authorities, as appropriate. The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other than the aggregate reserve established for claims for self-insured liabilities, none of those reserves are material. For matters, where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. These matters are subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings, could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period. Other Proceedings Litigation Against Former Executives - The Company filed litigation in the U.S. District Court for the District of New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against Scott Sider on March 28, 2019, all of whom were former executive officers of Old Hertz Holdings. The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the defendants in connection with restatements included in the Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and related accounting for prior periods. The Company is also seeking recovery for the costs of the SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and other damages resulting from the necessity of the restatements. The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights. In October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas. 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. The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020. The mediation was unsuccessful, but settlement discussions continued and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider. The Florida action is now closed. Fact discovery has now been completed in the New Jersey action and settlement discussions are again taking place before the case moves on to the pre-trial phase of experts’ reports and experts’ depositions. Pursuant to the agreements governing the separation of Herc Holdings from Hertz Global that occurred on June 30, 2016, Herc Holdings is entitled to 15% of the net proceeds of any repayment or recovery. Indemnification Obligations In the ordinary course of business, the Company has executed contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships and financial matters. Specifically, the Company has indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held responsible could be substantial. In addition, Hertz entered into customary indemnification agreements with Hertz Holdings and certain of the Company's stockholders and their affiliates pursuant to which Hertz Holdings and Hertz will indemnify those entities and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of such entities and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. The Company has entered into customary indemnification agreements with each of its directors and certain of its officers. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim. In connection with the Spin-Off (as defined in the Company's 2019 Form 10-K), 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. 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.

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2021
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Transactions and Agreements between Hertz Holdings and Hertz In June 2019, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $425 million with an expiration in June 2020 (the "2019 Master Loan"). The interest rate was based on the U.S. Dollar LIBOR rate plus a margin. As 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. 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 unaudited condensed consolidated balance sheet of Hertz as of December 31, 2020. On the Effective Date, the $65 million tax-related liability from Hertz to Hertz Holdings was reinstated and classified as due to affiliate in the accompanying consolidated balance sheet of Hertz as of September 30, 2021. See Note 17, "Liabilities Subject to Compromise." On May 23, 2020, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2021 (the "New Loan"). The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. In May 2021, upon expiration of the New Loan, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2022 (the "2021 Master Loan"), where amounts outstanding under the New Loan were transferred to the 2021 Master Loan. The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. As of December 31, 2020, there was $1 million outstanding under the 2021 Master Loan representing advances and any accrued but unpaid interest. On June 30, 2021, in connection with the Chapter 11 Emergence, the ATM Program contribution from Hertz Global, as discussed in Note 10, Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global, was used to settle amounts outstanding under the New Loan. As of September 30, 2021, there is no outstanding balance under the 2021 Master Loan. 767 Auto Leasing LLC In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated with the Icahn Group, a related party during the first half of 2020 until all owned shares of Hertz Global common stock were divested in May 2020, the option to acquire certain vehicles from Hertz at rates aligned with the rates at which Hertz sells vehicles to third parties. Hertz leases the vehicles purchased by 767 under the 767 Lease Agreement or from third parties, under a mutually developed fleet plan and Hertz manages, services, repairs, sells and maintains those leased vehicles on behalf of 767. Hertz currently rents the leased vehicles to drivers of transportation network companies ("TNC") from rental counters within locations leased or owned by affiliates of 767, including locations operated under a master lease agreement with The Pep Boys – Manny, Joe & Jack. The 767 Lease Agreement had an initial term, as extended, of approximately 22 months, and is subject to automatic six month renewals thereafter, unless terminated by either party (with or without cause) prior to the start of any such six month renewal. 767’s payment obligations under the 767 Lease Agreement are guaranteed by American Entertainment Properties Corp. ("AEPC"), an entity affiliated with Carl C. Icahn and his affiliates. During the three and nine ended September 30, 2021, 767 distributed $10 million and $25 million, respectively, to AEPC along with the return of certain vehicles, and there were no cash contributions from AEPC to 767. During the three and nine months ended September 30, 2020, 767 distributed $55 million to AEPC, and there were no cash contributions from AEPC to 767, except for certain services. The parties have agreed that the 767 Lease Agreement will terminate effective October 31, 2021, and that, in connection with the wind-down, Hertz will purchase certain of the 767 leased vehicles for continued rental as part of Hertz’s TNC rental fleet. The Company is entitled to 25% of the profit from the rental of the leased vehicles, as specified in the 767 Lease Agreement, which is variable and based primarily on the rental revenue, less certain vehicle-related costs, such as depreciation, licensing and maintenance expenses. The Company has determined that it is the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impact 767's economic performance and the Company's obligation to absorb 25% of 767's gains/losses. Accordingly, 767 is consolidated by the Company as a VIE.

Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

Segment InformationThe Company’s CODM assesses performance and allocates resources based upon the financial information for the Company’s operating segments. The Company aggregates certain of its operating segments into its reportable segments. 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 Rental Car ("Americas RAC") reportable segment, which were previously included in its International

Rental Car ("International RAC") reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. The Company has identified two reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows.

•Americas RAC – rental of vehicles (cars, crossovers, vans and light trucks), as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean;

•International RAC – rental and leasing of vehicles (cars, vans, crossovers and light trucks), as well as sales of value-added services, internationally and consists primarily of the Company's Europe operating segment and other international operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments; and

In addition to the above reportable segments, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt). Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.

The following tables provide significant statements of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Revenues
Americas RAC	$	1,914	$	892	$	4,524	$	2,857
International RAC	312		227		727		678
Total reportable segments	2,226		1,119		5,251		3,535
All other operations(1)	—		149		136		488
Total Hertz Global and Hertz	$	2,226	$	1,268	$	5,387	$	4,023
Depreciation of revenue earning vehicles and lease charges
Americas RAC	$	24	$	188	$	314	$	1,080
International RAC	37		53		106		200
Total reportable segments	61		241		420		1,280
All other operations(1)(2)	—		106		—		352
Total Hertz Global and Hertz	$	61	$	347	$	420	$	1,632
Adjusted EBITDA
Americas RAC	$	830	$	(11)	$	1,520	$	(701)
International RAC	78		(34)		69		(184)
Total reportable segments	908		(45)		1,589		(885)
All other operations(1)	—		24		13		71
Corporate	(48)		(5)		(100)		(41)
Total Hertz Global and Hertz	$	860	$	(26)	$	1,502	$	(855)

(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2) The decrease in depreciation of revenue earning vehicles and lease charges during the nine months ended September 30, 2021, is due in part to the suspension of depreciation for the Donlen business while classified as held for sale, prior to closing on March 30, 2021, as disclosed in Note 3, "Divestitures."



(In millions)	September 30, 2021		December 31, 2020
Total assets
Americas RAC	$	13,273	$	11,337
International RAC	3,134		2,661
Total reportable segments	16,407		13,998
All other operations(1)	—		1,818
Corporate	3,186		1,092
Total Hertz Global(2)	19,593		16,908
Corporate - Hertz(3)	—		(28)
Total Hertz(2)	$	19,593	$	16,880

(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures." At December 31, 2020, includes $1.8 billion of Donlen's assets which were classified as held for sale in the accompanying unaudited condensed consolidated balance sheet.

(2) The consolidated total assets of Hertz Global and Hertz as of September 30, 2021 and December 31, 2020 include total assets of VIEs of $745 million and $511 million, respectively, which can only be used to settle obligations of the VIEs. See "Pledges Related to Vehicle Financing" in Note 6, "Debt," and "767 Auto Leasing LLC" in Note 15, "Related Party Transactions," for further information.

(3) Excludes net proceeds of $28 million from an open market sale of Hertz Global common stock completed in June 2020, which is included in non-vehicle restricted cash in the accompanying unaudited condensed consolidated balance sheets at December 31, 2020.

Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:

Hertz Global



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Adjusted EBITDA:
Americas RAC	$	830	$	(11)	$	1,520	$	(701)
International RAC	78		(34)		69		(184)
Total reportable segments	908		(45)		1,589		(885)
All other operations(1)	—		24		13		71
Corporate(2)	(48)		(5)		(100)		(41)
Total Hertz Global	860		(26)		1,502		(855)
Adjustments:
Non-vehicle depreciation and amortization	(49)		(58)		(153)		(168)
Non-vehicle debt interest, net(3)	(22)		(17)		(157)		(118)
Vehicle debt-related charges(4)	(8)		(13)		(62)		(37)

Restructuring and restructuring related charges(5)	(22)		(7)		(72)		(54)
Technology-related intangible and other asset impairments(6)	—		—		—		(193)
Information technology and finance transformation costs(7)	(3)		(8)		(13)		(34)
Reorganization items, net(8)	—		(78)		(677)		(101)
Pre-reorganization charges and non-debtor financing charges(9)	(1)		(44)		(41)		(89)
Gain from the Donlen Sale(10)	—		—		400		—
Change in fair value of Public Warrants(11)	16		—		16		—
Other items(12)	(3)		(8)		77		(15)
Income (loss) before income taxes	$	768	$	(259)	$	820	$	(1,664)

Hertz



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Adjusted EBITDA:
Americas RAC	$	830	$	(11)	$	1,520	$	(701)
International RAC	78		(34)		69		(184)
Total reportable segments	908		(45)		1,589		(885)
All other operations(1)	—		24		13		72
Corporate(2)	(48)		(5)		(100)		(42)
Total Hertz	860		(26)		1,502		(855)
Adjustments:
Non-vehicle depreciation and amortization	(49)		(58)		(153)		(168)
Non-vehicle debt interest, net(3)	(22)		(17)		(157)		(116)
Vehicle debt-related charges(4)	(8)		(13)		(62)		(37)

Restructuring and restructuring related charges(5)	(22)		(7)		(72)		(54)
Technology-related intangible and other asset impairments(6)	—		—		—		(193)
Write-off of intercompany loan(13)	—		—		—		(133)
Information technology and finance transformation costs(7)	(3)		(8)		(13)		(34)
Reorganization items, net(8)	—		(78)		(513)		(101)
Pre-reorganization charges and non-debtor financing charges(9)	(1)		(44)		(41)		(89)
Gain from the Donlen Sale(10)	—		—		400		—
Other items(12)	(3)		(8)		77		(15)
Income (loss) before income taxes	$	752	$	(259)	$	968	$	(1,795)

(1)Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2)Represents other reconciling items primarily consisting of general corporate expenses, non-vehicle interest expense, as well as other business activities.

(3)In 2021 includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement recorded in the second quarter. See Note 6, "Debt," for further information.

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

(5)Represents charges incurred under restructuring actions as defined in U.S. GAAP. See Note 8, "Restructuring," for further information. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(6)Represents the impairment of technology-related intangible assets and capitalized cloud computing implementation costs, as disclosed in Note 5, "Goodwill and Intangible Assets, Net."

(7)Represents costs associated with the Company’s information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes.

(8)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 18, "Reorganization Items, Net."

(9)Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

(10)Represents the net gain from the sale of the Company's Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures."

(11)Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.

(12)Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests. For 2021, also includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of 2021 and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter. For 2020, also includes charges of $18 million for losses associated with certain vehicle damages, which were recorded in the second quarter, partially offset by a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.

(13)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 13, "Related Party Transactions."

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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