HERTZ GLOBAL HOLDINGS INC
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
HTZ$1.64-8.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001657853-24-000105
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001657853-24-000136
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 225 previous paragraphs and 250 current paragraphs.
166 unchanged; 48 reworded; 34 added; 10 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 20 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
As of September 30, 2024, the sale of the EV Disposal Groups was approximately 95% complete. During the nine months ended September 30, 2024, we incurred incremental depreciation charges, primarily in the first half of 2024, of $176 million for the write-down on the vehicles, of which $165 million and $11 million are associated with our Americas RAC and International RAC segments, respectively, and $47 million for losses incurred on the vehicles sold, primarily in our Americas RAC segment. Refer to Note 5, "Revenue Earning Vehicles," in Part I, Item 1 of this Quarterly Report for additional information.
Current report
Long-Lived Assets
Current report
Our long-lived assets consist primarily of revenue earning vehicles, ROU assets and property and equipment. We make estimates about the expected economic lives, projected residual values and the potential for impairment. We amortize long-lived assets using the straight-line method over the estimated economic lives. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors which could be indicators of impairment include, but are not limited to, (i) significant decrease in market prices of the assets, (ii) current period operating or cash flow losses or a projection or forecast that demonstrates continuing losses and (iii) significant changes in the estimated useful lives. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the estimated fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying value or estimated fair value less costs to sell.
Current report
During the third quarter of 2024, at the conclusion of our historical peak rental season, there was a reduction in the cash flow projections in the Americas RAC and International RAC segments, indicating that the carrying values of their long-lived assets may not be recoverable. The reduction was largely attributed to the acceleration of the rental fleet rotation in our segments, where shortening the useful life reduced the potential future cash flows expected to be earned from the fleet. Operating cash flow projections also deteriorated from delayed timing of operating cost improvements and longer timeframes associated with revenue maximization initiatives. As a result, we tested the recoverability of our Long-Lived Assets in our Americas RAC and International RAC segments and determined that an impairment existed.
Current report
Effective August 31, 2024, the Long-Lived Assets were written down to their estimated fair values, resulting in the recognition of an impairment charge of $1.0 billion, of which $923 million and $125 million were associated with our revenue earning vehicles and ROU assets, respectively. As the Long-Lived Assets impairment was recognized as of August 31, 2024, depreciation expense during the third quarter of 2024 includes two months of depreciation at pre-impairment rates and one month at post-impairment rates.
Current report
To the extent there are further changes in market conditions or the performance of our long-lived assets, there is a possibility that we could incur additional impairments in the future. Refer to Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report for additional information.
Current report
DOE decreased $30 million in the third quarter of 2024 compared to the same period in 2023, resulting from a decrease of $39 million in our Americas RAC segment, partially offset by an increase of $13 million in our International RAC segment. DOE decreased due primarily to lower volume largely in our Americas RAC segment, partially offset by increased self-insurance liabilities as a result of adverse experience and case development and increased vehicle in-fleeting costs related to our accelerated fleet rotation in 2024.
Current report
Vehicle interest expense, net decreased $5 million in the third quarter of 2024 compared to the same period in 2023 due primarily to interest rate mix, partially offset by higher interest rates.
Current report
Non-vehicle interest expense, net increased $27 million in the third quarter of 2024 compared to the same period in 2023 due primarily to higher debt levels and higher benchmark rates.
Current report
In the third quarter of 2024, we recognized expense of $288 million in our corporate operations related to an increase to an existing bankruptcy-related litigation reserve, as disclosed in Note 14, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report.
Current report
In the third quarter of 2024, we recognized an impairment charge of $1.0 billion associated with the Long-Lived Assets in our Americas RAC and International RAC segments, as disclosed in Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
Vehicle interest expense, net increased $42 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher interest rates and increased debt levels.
Current report
Non-vehicle interest expense, net increased $83 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher debt levels and higher benchmark rates.
Current report
In the nine months ended September 30, 2024, we recognized expense of $288 million in our corporate operations related to an increase to an existing bankruptcy-related litigation reserve, as disclosed in Note 14, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report.
Current report
In the nine months ended September 30, 2024, we recognized an impairment charge of $1.0 billion associated with the Long-Lived Assets in our Americas RAC and International RAC segments, as disclosed in Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $408 million in the third quarter of 2024 compared to the same period in 2023 due primarily to (i) deterioration in residual values at the expected time of disposal, (ii) decreased holding periods resulting in part from the acceleration of our rental fleet rotation and (iii) per unit losses recognized on vehicle dispositions during the third quarter of 2024 compared to per unit gains recognized in the same period in 2023, partially offset by a decrease in Average Vehicles. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Current report
DOE for Americas RAC decreased $39 million in the third quarter of 2024 compared to the same period in 2023 due primarily to lower volume as well as lower personnel costs and decreased collision and damage costs, partially offset by increased self-insurance liabilities as a result of adverse experience and case development and increased vehicle in-fleeting costs related to our accelerated fleet rotation in 2024.
Current report
Americas RAC recognized an impairment charge of $865 million in the third quarter of 2024 associated with its Long-Lived Assets, of which $740 million and $125 million related to its revenue earning vehicles and ROU assets, respectively. Refer to Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report for further details.
Current report
Americas RAC recognized an impairment charge of $865 million in the nine months ended September 30, 2024 associated with its Long-Lived Assets, of which $740 million and $125 million related to its revenue earning vehicles and ROU assets, respectively. Refer to Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report for further details.
Current report
International RAC recognized an impairment charge of $183 million in the third quarter of 2024 associated with its Long-Lived Assets, as disclosed in Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
SG&A for International RAC increased $39 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher intercompany royalty assessment fees paid to our corporate operations, increased advertising spend, increased restructuring related costs and the release of a litigation reserve in the 2023 period.
Current report
International RAC recognized an impairment charge of $183 million in the nine months ended September 30, 2024 associated with its Long-Lived Assets, as disclosed in Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
(6)Represents an increase to an existing bankruptcy-related litigation reserve recorded in September 2024. See Note 14, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report.
Current report
(7)Represents Long-Lived Assets impairment charges recognized in the third quarter of 2024. See Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
(1)Based on December 31, 2023 foreign currency exchange rates for all periods presented.
Current report
(1)Based on December 31, 2023 foreign currency exchange rates for all periods presented.
Current report
(1)Reflects one month of depreciation at post-impairment rates for the three and nine months ended September 30, 2024. See Note 3, "Long-Lived Assets Impairment," in Part I, Item 1 of this Quarterly Report.
Current report
(2)Based on December 31, 2023 foreign currency exchange rates for all periods presented.
Current report
The net carrying amount of the Exchangeable Notes consists of the following:
Current report
(1) The debt discount is amortized to non-vehicle interest expense over the term of the Exchangeable Notes using the effective interest method.
Current report
Interest expense recognized for the Exchangeable Notes consists of the following:
Current report
New Zealand RCF
Current report
Revenue earning vehicle expenditures decreased $454 million, or 5%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily in our Americas RAC segment, resulting from decreased vehicle acquisitions resulting in part from our fleet-related initiatives and higher fleet levels entering 2024. Proceeds from disposal of revenue earning vehicles increased $478 million, or 11%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 resulting from increased vehicle disposals in 2024.
Current report
•the timing of our fleet rotation, the performance of our long-lived assets and changes in market conditions, which could result in future impairments of our long-lived assets;
Removed paragraphs (10)
Previous report
As of June 30, 2024, approximately 90% of the First EV Disposal Group, which was classified as held for sale in December 2023, has been sold and the carrying values of the remaining vehicles written down to fair value less costs to sell. This resulted in charges of $5 million and $85 million, inclusive of the vehicles sold and the write-down on the remaining vehicles, for the three and six months ended June 30, 2024, respectively, in our Americas RAC segment. As of June 30, 2024, approximately 60% of the Second EV Disposal Group, which was classified as held for sale in March 2024, has been sold and the carrying values of the remaining vehicles written down to fair value less costs to sell. This resulted in charges of $20 million and $127 million and $5 million and $12 million, inclusive of the vehicles sold and the write-down on the remaining vehicles, in our Americas RAC and International RAC segments for the three and six months ended June 30, 2024, respectively. See Note 4, "Revenue Earning Vehicles," in Part I, Item 1 of this Quarterly Report for additional information.
Previous report
DOE increased $93 million in the second quarter of 2024 compared to the same period in 2023, with increases of $59 million and $33 million in our Americas RAC and International RAC segments, respectively. DOE increased due primarily to a loss recovery settlement in 2023 in our Americas RAC segment, increased self-insurance liabilities as a result of adverse experience and case development, higher personnel costs and increased collision and damage costs.
Previous report
Non-vehicle interest expense, net increased $32 million in the second quarter of 2024 compared to the same period in 2023 due primarily to higher debt levels and higher benchmark rates, partially offset by interest income due to higher market rates.
Previous report
EVs classified as held for sale, primarily in the first quarter of 2024 in our Americas RAC segment. We expect that depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment will continue to be impacted during the second half of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the second half of 2023.
Previous report
Vehicle interest expense, net increased $46 million in the first half of 2024 compared to the first half of 2023 due primarily to higher interest rates.
Previous report
Non-vehicle interest expense, net increased $56 million in the first half of 2024 compared to the first half of 2023 due primarily to higher debt levels and higher benchmark rates, partially offset by interest income due to higher market rates.
Previous report
Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $633 million in the second quarter of 2024 compared to the same period in 2023 due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) per unit losses recognized on vehicle dispositions during the second quarter of 2024 compared to per unit gains recognized in the same period in 2023 and (iii) an increase in Average Vehicles. We expect that depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment will continue to be impacted during the second half of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the second half of 2023.
Previous report
DOE for Americas RAC increased $173 million in the first half of 2024 compared to the first half of 2023 due in part to increased volume. DOE for Americas RAC increased due primarily to increased self-insurance liabilities as a result of adverse experience and case development, a loss recovery in the second quarter of 2023 and increased collision and damage costs.
Previous report
SG&A for International RAC increased $20 million in the first half of 2024 compared to the first half of 2023 due primarily to higher intercompany royalty assessment fees paid to our corporate operations and increased restructuring related costs, partially offset by decreased advertising spend.
Previous report
Revenue earning vehicle expenditures decreased $916 million, or 14%, in the first half of 2024 compared to the first half of 2023, primarily in our Americas RAC segment, resulting from higher fleet levels at the end of 2023 that continued into 2024.
Reworded paragraphs (48)
Previous wording
Three and Six Months Ended June 30, 2024 Operating Overview
Current wording
Three and Nine Months Ended September 30, 2024 Operating Overview
Previous wording
The following charts provide the period-over-period change for several key factors influencing our results for the three and six months ended June 30, 2024 and 2023.
Current wording
The charts below provide the period-over-period change for several key factors influencing our results for the three and nine months ended September 30, 2024 and 2023.
Previous wording
Recoverability of Goodwill and Intangible Assets
Current wording
Recoverability of Goodwill and Indefinite-lived Intangible Assets
Previous wording
As of June 30, 2024, we tested the recoverability of our goodwill and indefinite-lived intangible assets due to the impact related to our reduction in cash flow projections and declines in the stock price of Hertz Global. The quantitative fair value test utilized our most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 2% and a range of discount rates between 19.0% and 12.0%. Based on the quantitative tests, no impairments were recorded in the second quarter of 2024. However, the fair value of the Dollar and Thrifty tradename, which is an indefinite-lived intangible asset, in our Americas RAC segment was in excess by 12% of the carrying values of $934 million.
Current wording
As of September 30, 2024, we tested the recoverability of our goodwill and indefinite-lived intangible assets due to the impact related to the reduction in the cash flow projections in our Americas RAC and International RAC segments. The quantitative fair value test utilized our most recent cash flow projections, including a range of potential outcomes, along with a long-term growth rate of 2% and a range of discount rates between 20.0% and 12.0%. Based on the quantitative tests, no impairments were recorded in the third quarter of 2024. However, the fair value of the Dollar and Thrifty tradename, which is an indefinite-lived intangible asset, in our Americas RAC segment was in excess by 12% of the carrying values of $934 million.
Previous wording
Total revenues decreased $85 million in the second quarter of 2024 compared to the same period in 2023, resulting primarily from a decrease of $87 million in our Americas RAC segment. The decrease in total revenues was due primarily to lower pricing.
Current wording
Total revenues decreased $127 million in the third quarter of 2024 compared to the same period in 2023, resulting from a decrease of $110 million and $16 million in our Americas RAC and International RAC segments, respectively. The decrease in total revenues was due primarily to lower volume.
Previous wording
Depreciation of revenue earning vehicles and lease charges, net increased $706 million in the second quarter of 2024 compared to the same period in 2023, of which $633 million and $73 million were attributed to our Americas RAC and International RAC segments, respectively. Depreciation of revenue earning vehicles and lease charges, net increased due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) per unit losses recognized on vehicle dispositions during the second quarter of 2024 compared to per unit gains recognized in the same period in 2023 and (iii) an increase in Average Vehicles. We expect that depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment will continue to be impacted during the second half of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the second half of 2023.
Current wording
Depreciation of revenue earning vehicles and lease charges, net increased $436 million in the third quarter of 2024 compared to the same period in 2023, of which $408 million and $29 million were attributed to our Americas RAC and International RAC segments, respectively. Depreciation of revenue earning vehicles and lease charges, net increased due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) decreased holding periods resulting from the acceleration of our rental fleet rotation and (ii) per unit losses recognized on vehicle dispositions during the third quarter of 2024 compared to per unit gains recognized in the same period in 2023, partially offset by lower Average Vehicles. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Previous wording
SG&A decreased $42 million in the second quarter of 2024 compared to the same period in 2023 driven primarily by decreases of $32 million and $11 million associated with our corporate operations and our Americas RAC segment, respectively. The decrease in costs associated with our corporate operations was due primarily to decreased personnel costs and intercompany royalty assessment fees received from our International RAC segment, partially offset by increased restructuring related costs. SG&A in our Americas RAC segment decreased due primarily to reduced advertising spend.
Current wording
SG&A decreased $19 million in the third quarter of 2024 compared to the same period in 2023 driven primarily by a decrease of $36 million associated with our corporate operations, partially offset by an increase of $16 million in our International RAC segment. The decrease in SG&A associated with our corporate operations was due primarily to intercompany royalty assessment fees received from our International RAC and Americas RAC segments, reduced non-cash stock-based compensation charges and decreased third-party spend. SG&A in our International RAC segment increased due primarily to higher intercompany royalty assessment fees paid to our corporate operations and the release of a litigation reserve in the 2023 period.
Previous wording
For the three months ended June 30, 2024, we recorded a tax provision of $391 million, which resulted in an effective tax rate of (61%). For the three months ended June 30, 2023, we recorded a tax provision of $18 million, which resulted in an effective tax rate of 7%. The change in taxes in the three months ended June 30, 2024 compared to the same period in 2023 was primarily driven by lower pretax income in 2024, valuation allowances on U.S. and foreign deferred tax assets recorded in 2024 and lower estimated EV credits in 2024.
Current wording
For the three months ended September 30, 2024, we recorded a tax benefit of $287 million, which resulted in an effective tax rate of 17%. For the three months ended September 30, 2023, we recorded a tax benefit of $68 million, which resulted in an effective tax rate of (30)%. The change in taxes in the three months ended September 30, 2024 compared to the same period in 2023 was driven primarily by lower pretax income, changes in valuation allowances on deferred tax assets and lower estimated EV credits.
Previous wording
Total revenues decreased $51 million in the first half of 2024 compared to the first half of 2023 due to lower pricing, partially offset by higher volume. Total revenues in our Americas RAC segment decreased $78 million due primarily to lower pricing, partially offset by an increase of $28 million in our International RAC segment resulting from higher volume.
Current wording
Total revenues decreased $178 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to lower pricing, partially offset by higher volume. Total revenues in our Americas RAC segment decreased $189 million due primarily to lower pricing, partially offset by an increase of $9 million in our International RAC segment resulting primarily from higher volume.
Previous wording
Depreciation of revenue earning vehicles and lease charges, net increased $1.3 billion in the first half of 2024 compared to the first half of 2023, of which $1.2 billion is attributable to our Americas RAC segment. Depreciation of revenue earning vehicles and lease charges, net increased due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) per unit losses recognized on vehicle dispositions during the first half of 2024 compared to per unit gains recognized in the same period in 2023 and (iii) write-downs on the carrying values of the
Current wording
Depreciation of revenue earning vehicles and lease charges, net increased $1.7 billion in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, of which $1.6 billion is attributable to our Americas RAC segment. Depreciation of revenue earning vehicles and lease charges, net increased due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) decreased holding periods resulting from the acceleration of our rental fleet rotation (iii) per unit losses recognized on vehicle dispositions during the nine months ended nine month ended September 30, 2024 compared to per unit gains recognized in the same period in 2023 and (iv) write-downs on the carrying values of the EVs classified as held for sale, primarily in the first half of 2024 in our Americas RAC segment. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Previous wording
DOE increased $238 million in the first half of 2024 compared to the first half of 2023 with increases of $173 million and $67 million in our Americas RAC and International RAC segments, respectively. The increase in DOE was due primarily to increased self-insurance liabilities as a result of adverse experience and case development, increased collision and damage costs, a loss recovery settlement in the second quarter of 2023 in our Americas RAC segment and higher personnel costs.
Current wording
DOE increased $210 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 with increases of $133 million and $80 million in our Americas RAC and International RAC segments, respectively. The increase in DOE was due primarily to increased self-insurance liabilities as a result of adverse experience and case development, increased collision and damage costs, a loss recovery settlement in the second quarter of 2023, increased vehicle in-fleeting costs and higher personnel costs.
Previous wording
SG&A decreased $101 million in the first half of 2024 compared to the first half of 2023 driven primarily by a decrease of $130 million associated with our corporate operations, partially offset by increases of $20 million and $8 million in our International RAC and Americas RAC segments, respectively. The decrease in cost associated with our corporate operations was due primarily to a non-cash stock-based compensation gain related to forfeitures of former CEO awards in March 2024 and intercompany royalty assessment fees received from our International RAC segment, partially offset by increased restructuring related costs. SG&A in our International RAC segment increased due primarily to intercompany royalty assessment fees paid to our corporate operations and increased restructuring related costs, partially offset by decreased advertising spend. SG&A in our Americas RAC segment increased due primarily to increased restructuring related costs, partially offset by reduced advertising spend.
Current wording
SG&A decreased $121 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 driven primarily by a decrease of $166 million associated with our corporate operations, partially offset by increases of $39 million and $7 million in our International RAC and Americas RAC segments, respectively. The decrease in SG&A associated with our corporate operations was due primarily to a non-cash stock-based compensation gain related to forfeitures of former CEO awards in March 2024, intercompany royalty assessment fees received from our International RAC and Americas RAC segments, decreased third-party spend and reduced non-cash stock-based compensation charges, partially offset by increased restructuring related costs. SG&A in our International RAC segment increased due primarily to higher intercompany royalty assessment fees paid to our corporate operations, increased advertising spend, increased restructuring related costs and the release of a litigation reserve in the 2023 period. SG&A in our Americas RAC segment increased due primarily to increased restructuring related costs, higher intercompany royalty assessment fees paid to our corporate operations and increased personnel costs, partially offset by reduced advertising spend.
Previous wording
In the first half of 2023, we recognized a gain of $162 million on the sale of certain non-vehicle capital assets in our Americas RAC segment, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.
Current wording
In the nine months ended September 30, 2023, we recognized a gain of $162 million on the sale of certain non-vehicle capital assets in our Americas RAC segment, as disclosed in Note 4, "Divestitures," in Part I, Item 1 of this Quarterly Report.
Previous wording
For the first half of 2024, we recorded a tax benefit of $4 million, which resulted in an effective tax rate of 0%. For the first half of 2023, we recorded a tax benefit of $116 million, which resulted in an effective tax rate of (26)%. The change in tax in the first half of 2024 compared to the same period in 2023 is driven by lower pretax income in 2024, valuation allowances on U.S. and foreign deferred tax assets recorded in 2024, and benefits related to our pre-filing agreement with the IRS in 2023.
Current wording
For the nine months ended September 30, 2024, we recorded a tax benefit of $291 million, which resulted in an effective tax rate of 10%. For the nine months ended September 30, 2023, we recorded a tax benefit of $184 million, which resulted in an effective tax rate of (27)%. The change in tax in the nine months ended September 30, 2024 compared to the same period in 2023 was driven primarily by lower pretax income, changes in valuation allowances on deferred tax assets and lower estimated EV credits.
Previous wording
Hertz Global had income of $165 million and $251 million from the change in fair value of Public Warrants that were incremental to Hertz for the second quarter and first half of 2024, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.
Current wording
Hertz Global had income of $21 million and $272 million from the change in fair value of Public Warrants that were incremental to Hertz for the third quarter and nine months ended September 30, 2024, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.
Previous wording
Hertz Global had losses of $100 million and $218 million from the change in fair value of Public Warrants that were incremental to Hertz for the second quarter and first half of 2023, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.
Current wording
Hertz Global had income of $328 million and $110 million from the change in fair value of Public Warrants that were incremental to Hertz for the third quarter and nine months ended September 30, 2023, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.
Previous wording
Total Americas RAC revenues decreased $87 million in the second quarter of 2024 compared to the same period in 2023 due primarily to lower pricing. Total RPD declined due primarily to lower rates in most customer channels. Transaction Days were largely consistent with the second quarter of 2023. Airport revenues comprised 69% of total revenues for the segment in the second quarter of 2024 and in the same period in 2023.
Current wording
Total Americas RAC revenues decreased $110 million in the third quarter of 2024 compared to the same period in 2023 due primarily to lower volume. Transaction Days declined due primarily to lower volumes in most customer channels. Total RPD was primarily flat in the third quarter of 2024 compared to the same period in 2023. Airport revenues comprised 70% of total revenues for the segment in the third quarter of 2024 compared to 69% in the same period in 2023.
Previous wording
SG&A for Americas RAC decreased $11 million in the second quarter of 2024 compared to the same period in 2023 due primarily to reduced advertising spend.
Current wording
SG&A for Americas RAC in the third quarter of 2024 was primarily flat compared to the same period in 2023 due primarily to reduced advertising spend, partially offset by increased personnel costs and higher intercompany royalty assessment fees paid to our corporate operations.
Previous wording
Vehicle interest expense for Americas RAC increased $10 million in the second quarter of 2024 compared to the same period in 2023 due primarily to higher average interest rates resulting primarily from the issuances of new HVF III Series Notes in 2023 and higher benchmark rates on the HVF III 2021-A Notes.
Current wording
Vehicle interest expense for Americas RAC decreased $8 million in the third quarter of 2024 compared to the same period in 2023 due primarily to interest rate mix and lower debt levels, partially offset by higher average interest rates resulting primarily from the issuances of new HVF III Series Notes in the third quarter of 2024 and higher benchmark rates on the HVF III 2021-A Notes.
Previous wording
Total Americas RAC revenues decreased $78 million in the first half of 2024 compared to the first half of 2023 due to lower pricing, partially offset by higher volume. Total RPD declined due primarily to lower rates in most customer channels. The increase in Transaction Days was driven primarily by volume increases across most leisure categories and ride sharing. Airport revenues comprised 68% of total revenues for the segment in the first half of 2024 and the first half of 2023.
Current wording
Total Americas RAC revenues decreased $189 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to lower pricing. Total RPD declined due primarily to lower rates in most customer channels. Transaction Days was generally consistent with the same period in 2023. Airport revenues comprised 69% of total revenues for the segment in the nine months ended September 30, 2024 and in the nine months ended September 30, 2023.
Previous wording
Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $1.2 billion in the first half of 2024 compared to the first half of 2023 due primarily to (i) deterioration in the residual values at the expected time of disposal, (ii) per unit losses recognized on vehicle dispositions during the first half of 2024 compared to per unit gains recognized in the same period in 2023, (iii) write-downs on the carrying values of the EVs classified as held for sale, primarily in the first quarter of 2024 and (iv) an increase in Average Vehicles. We expect that depreciation of revenue earning vehicles and lease charges, net in our Americas RAC segment will continue to be impacted during the second half of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the second half of 2023.
Current wording
Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $1.6 billion in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to (i) deterioration in residual values at the expected time of disposal, (ii) decreased holding periods resulting in part from the acceleration of our rental fleet rotation, (iii) per unit losses recognized on vehicle dispositions during the nine months ended September 30, 2024 compared to per unit gains recognized in the same period in 2023 and (iv) write-downs on the carrying values of the EVs classified as held for sale, primarily in the first half of 2024. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Previous wording
DOE for Americas RAC increased $59 million in the second quarter of 2024 compared to the same period in 2023 due primarily to a loss recovery settlement in 2023, increased self-insurance liabilities as a result of adverse experience and case development, increased collision and damage costs and higher personnel costs.
Current wording
DOE for Americas RAC increased $133 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to increased self-insurance liabilities as a result of adverse experience and case development, a loss recovery in the second quarter of 2023, increased collision and damage costs and increased vehicle in-fleeting costs related to our accelerated fleet rotation in the third quarter of 2024.
Previous wording
SG&A for Americas RAC increased $8 million in the first half of 2024 compared to the first half of 2023 due primarily to increased restructuring related costs, partially offset by reduced advertising spend.
Current wording
SG&A for Americas RAC increased $7 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to increased restructuring related costs, higher intercompany royalty assessment fees paid to our corporate operations and increased personnel costs, partially offset by reduced advertising spend.
Previous wording
Vehicle interest expense for Americas RAC increased $34 million in the first half of 2024 compared to the first half of 2023 due primarily to higher average interest rates resulting primarily from the issuances of new HVF III Series Notes in 2023 and higher benchmark rates on the HVF III 2021-A Notes. Vehicle interest expense in our Americas RAC segment was also impacted by the unwind of certain of its interest rate caps in the first quarter of 2023 resulting in the realization of $88 million of previously unrealized gains, partially offset by a $98 million realized gain for which there was no comparable transaction in 2024.
Current wording
Vehicle interest expense for Americas RAC increased $25 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher average interest rates resulting primarily from the issuances of new HVF III Series Notes in 2024 and higher benchmark rates on the HVF III 2021-A Notes, partially offset by interest rate mix and lower debt levels. Vehicle interest expense in our Americas RAC segment was also impacted by the unwind of certain of its interest rate caps in the first quarter of 2023 resulting in the realization of $88 million of previously unrealized gains, partially offset by a $98 million realized gain for which there was no comparable transaction in 2024.
Previous wording
Total revenues for International RAC increased $3 million in the second quarter of 2024 compared to the same period in 2023 due primarily to higher volume, partially offset by lower pricing. Transaction Days increased 4% driven by higher volume in certain leisure categories, primarily in Europe. Total RPD declined in the second quarter of 2024 compared to the same period in 2023 due primarily to lower rates in most customer channels.
Current wording
Total revenues for International RAC decreased $16 million in the third quarter of 2024 compared to the same period in 2023 due primarily to lower volume and lower pricing. Transaction Days decreased due primarily to lower volume, primarily in Europe, in certain business categories, partially offset by higher volume in certain leisure categories. Total RPD declined in the third quarter of 2024 compared to the same period in 2023 due primarily to lower rates in most customer channels.
Previous wording
Depreciation of revenue earning vehicles and lease charges, net for International RAC in the second quarter of 2024 increased $73 million compared to the same period in 2023 due primarily to (i) per unit losses recognized on vehicle dispositions in the second quarter of 2024 compared to per unit gains recognized in the same period in 2023, (ii) deterioration in the residual values at the expected time of disposal and (iii) an increase in Average Vehicles.
Current wording
Depreciation of revenue earning vehicles and lease charges, net for International RAC in the third quarter of 2024 increased $29 million compared to the same period in 2023 due primarily to (i) per unit losses recognized on vehicle dispositions in the third quarter of 2024 compared to per unit gains recognized in the same period in 2023 and (ii) deterioration in residual values at the expected time of disposal. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Previous wording
DOE for International RAC increased $67 million in the first half of 2024 compared to the first half of 2023 due primarily to higher personnel costs, increased self-insurance liabilities as a result of adverse experience and case development and increased collision and damage costs.
Current wording
DOE for International RAC increased $13 million in the third quarter of 2024 compared to the same period in 2023 due primarily to higher personnel costs, increased vehicle in-fleeting costs, increased self-insurance liabilities as a result of adverse experience and case development and increased collision and damage costs.
Previous wording
SG&A for International RAC in the second quarter of 2024 was largely consistent with the same period in 2023 due primarily to higher intercompany royalty assessment fees paid to our corporate operations and increased restructuring related costs, partially offset by decreased advertising spend.
Current wording
SG&A for International RAC in the third quarter of 2024 increased $16 million compared to the same period in 2023 due primarily to higher intercompany royalty assessment fees paid to our corporate operations and the release of a litigation reserve in the 2023 period.
Previous wording
Vehicle interest expense for International RAC increased $7 million in the second quarter of 2024 compared to the same period in 2023 due primarily to higher debt levels and higher market interest rates.
Current wording
Vehicle interest expense for International RAC increased $3 million in the third quarter of 2024 compared to the same period in 2023 due primarily to increased debt levels, partially offset by lower market interest rates.
Previous wording
Total revenues for International RAC increased $28 million in the first half of 2024 compared to the first half of 2023 due primarily to higher volume. Transaction Days increased 5% driven primarily by higher volume in most leisure categories, primarily in Europe. Total RPD was primarily flat compared to the first half of 2023.
Current wording
Total revenues for International RAC increased $9 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher volume, partially offset by lower pricing. Transaction Days increased driven primarily by higher volume in certain leisure categories, primarily in Europe. Total RPD declined resulting primarily from lower rates in certain leisure categories.
Previous wording
Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $134 million in the first half of 2024 compared to the first half of 2023 due primarily to (i) per unit losses recognized on vehicle dispositions in the first half of 2024 compared to per unit gains recognized in the same period in 2023, (ii) deterioration in the residual values at the expected time of disposal and (iii) an increase in Average Vehicles.
Current wording
Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $162 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to (i) per unit losses recognized on vehicle dispositions in the nine months ended September 30, 2024 compared to per unit gains recognized in the same period in 2023 and (ii) deterioration in the residual values at the expected time of disposal. We expect that depreciation of revenue earning vehicles and lease charges, net will continue to be impacted during the fourth quarter of 2024 by an uncertain residual environment and heightened disposals as part of our fleet refresh initiatives versus the same period in 2023.
Previous wording
DOE for International RAC increased $33 million in the second quarter of 2024 compared to the same period in 2023 due primarily to increased self-insurance liabilities as a result of adverse experience and case development, higher personnel costs and increased collision and damage costs.
Current wording
DOE for International RAC increased $80 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher personnel costs, increased collision and damage costs and increased self-insurance liabilities as a result of adverse experience and case development.
Previous wording
Vehicle interest expense for International RAC increased $14 million in the first half of 2024 compared to the first half of 2023 due primarily to higher market interest rates and higher debt levels.
Current wording
Vehicle interest expense for International RAC increased $17 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to higher debt levels and higher market interest rates.
Previous wording
(a)Adjusted Corporate EBITDA is calculated as net income (loss), adjusted for income taxes; non-vehicle depreciation and amortization; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; unrealized (gains) losses from financial instruments; gain on sale of non-vehicle capital assets; certain non-cash stock-based compensation; change in fair value of Public Warrants and certain other miscellaneous items. When evaluating our operating performance, investors should not consider Adjusted Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance determined in accordance with U.S. GAAP. The reconciliations to the most comparable consolidated U.S. GAAP measure are presented below:
Current wording
(a)Adjusted Corporate EBITDA is calculated as net income (loss), adjusted for income taxes; non-vehicle depreciation and amortization; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; unrealized (gains) losses from financial instruments; change in fair value of Public Warrants and certain other miscellaneous or non-recurring items. When evaluating our operating performance, investors should not consider Adjusted Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance determined in accordance with U.S. GAAP. The reconciliations to the most comparable consolidated U.S. GAAP measure are presented below:
Previous wording
(6)Represents miscellaneous items. For the three and six months ended June 30, 2024, primarily includes certain IT-related charges, cloud computing costs and certain storm-related damages, partially offset by certain litigation settlements. For the three and six months ended June 30, 2023, primarily includes a loss recovery settlement, partially offset by certain IT-related charges.
Current wording
(8)Represents miscellaneous items. For the three and nine months ended September 30, 2024, primarily includes certain IT-related charges, cloud computing costs and certain storm-related vehicle damages, partially offset by certain litigation settlements and a loss recovery settlement. For the three and nine months ended September 30, 2023, primarily includes certain IT-related charges, certain storm-related vehicle damages and certain professional fees and charges related to the settlement of bankruptcy claims, partially offset by a loss recovery settlement.
Previous wording
(7)Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants.
Current wording
(9)Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants.
Previous wording
As of June 30, 2024, we had $568 million of cash and cash equivalents and $426 million of restricted cash and cash equivalents. As of June 30, 2024, $277 million of cash and cash equivalents and $70 million of restricted cash and cash equivalents were held by our subsidiaries outside of the U.S. We continue to assert non-permanent reinvestment of foreign earnings that give rise to excess cash, provided such cash can be remitted in a tax efficient manner.
Current wording
As of September 30, 2024, we had $501 million of cash and cash equivalents and $404 million of restricted cash and cash equivalents. As of September 30, 2024, $191 million of cash and cash equivalents and $121 million of restricted cash and cash equivalents were held by our subsidiaries outside of the U.S. We continue to assert non-permanent reinvestment of foreign earnings that give rise to excess cash, provided such cash can be remitted in a tax efficient manner.
Previous wording
As of June 30, 2024 and December 31, 2023, Hertz had cash and cash equivalents of $568 million and $764 million, respectively, and restricted cash and cash equivalents of $426 million and $442 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for the periods shown:
Current wording
As of September 30, 2024 and December 31, 2023, Hertz had cash and cash equivalents of $501 million and $764 million, respectively, and restricted cash and cash equivalents of $404 million and $442 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for the periods shown:
Previous wording
During the first half of 2024, cash flows from operating activities decreased $138 million period over period due primarily to a $432 million change in net income, as adjusted for non-cash and non-operating items, partially offset by a $294 million change in working capital accounts. Cash flows from working capital accounts increased due primarily to lower value added tax receivables, an increase in self-insurance liabilities as a result of adverse experience and case development, non-vehicle payables due to timing, non-recurring capital outlays for certain prepaids in 2023 and a loss recovery settlement received in the second half of 2023.
Current wording
During the nine months ended September 30, 2024, cash flows from operating activities decreased $94 million period over period due primarily to a $876 million change in net income, as adjusted for non-cash and non-operating items, inclusive of a $1.0 billion Long-Lived Assets impairment recognized in the third quarter of 2024, partially offset by a $782 million change in working capital accounts. Cash flows from working capital accounts increased due primarily to an increase to an existing bankruptcy-related litigation reserve recorded in the third quarter of 2024, a decrease in non-vehicle receivables due to timing, lower value added tax receivables, an increase in self-insurance liabilities as a result of adverse experience and case development and non-recurring capital outlays for certain prepaids in 2023.
Previous wording
Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the first half of 2024, there was a $945 million decrease in the cash used in investing activities period over period due primarily to a $1.1 billion decrease in revenue earning vehicle expenditures, net, partially offset by $168 million of net proceeds received in March 2023 from the sale of certain non-vehicle capital assets as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. The decrease in revenue earning vehicle expenditures, net primarily resulted from per unit losses recognized on vehicle dispositions in the first half of 2024 compared to per unit gains recognized in the same period in 2023 and higher fleet levels at the end of 2023 that continued into 2024.
Current wording
Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the nine months ended September 30, 2024, there was an $841 million decrease in the cash used in investing activities period over period due primarily to a $932 million decrease in revenue earning vehicle expenditures, net, partially offset by $168 million of net proceeds received in March 2023 from the sale of certain non-vehicle capital assets as disclosed in Note 4, "Divestitures," in Part I, Item 1 of this Quarterly Report. The decrease in revenue earning vehicle expenditures, net primarily resulted from decreased vehicle acquisitions resulting in part from our fleet-related initiatives and higher fleet levels entering 2024 and increased vehicle dispositions.
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(1) Refer also to Note 13, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
Current report — wording carried from elsewhere
In September 2024, Hertz New Zealand Holdings, an indirect wholly owned subsidiary of Hertz, amended the New Zealand RCF to extend the maturity date to August 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Vehicle interest expense, net increased $17 million in the second quarter of 2024 compared to the same period in 2023 due primarily to higher interest rates.