HERTZ CORP

The footnote in the table above is shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

Total revenues increased $192 million in the first quarter of 2026 compared to the same period in 2025, resulting from increases of $138 million and $52 million in our Americas RAC and International RAC segments, respectively. The increase in total revenues was due primarily to improved pricing and volume.

Depreciation of revenue earning vehicles and lease charges, net decreased $55 million in the first quarter of 2026 compared to the same period in 2025, of which $60 million was attributed to our Americas RAC segment. Depreciation of revenue earning vehicles and lease charges, net decreased due primarily to (i) a reduction in costs associated with the sales of vehicles driven by fewer dispositions through our retail channels and (ii) impacts from a reduction in capital costs for newly acquired vehicles and the strengthening of residual values at the expected time of disposal resulting from market improvements.

DOE increased $70 million in the first quarter of 2026 compared to the same period in 2025, resulting from increases of $35 million and $32 million in our International RAC and Americas RAC segments, respectively. The increase in DOE was primarily on higher volume and the result of increased personnel and maintenance costs in our International RAC segment. DOE was also impacted by an unfavorable $23 million fx impact in the first quarter of 2026 in our International RAC segment.

Non-vehicle depreciation and amortization decreased $5 million in the first quarter of 2026 compared to the same period in 2025 due primarily to an increase in assets that are fully depreciated and certain asset retirements that occurred in 2025 in our Americas RAC segment.

SG&A increased $15 million in the first quarter of 2026 compared to the same period in 2025 driven primarily by increases of $11 million and $9 million in our International RAC and Americas RAC segments, respectively, partially offset by a decrease of $5 million in our corporate operations. The increase in SG&A was due primarily to an unfavorable fx impact in the first quarter of 2026 and increased personnel and restructuring related costs in our International RAC segment, as well as a result of increased advertising spend in our Americas RAC segment. The decrease in SG&A in our corporate operations was due primarily to a reduction in litigation charge and lower personnel costs.

Vehicle interest expense, net increased $7 million in the first quarter of 2026 compared to the same period in 2025 due primarily in our Americas RAC segment resulting from higher average rates and increased debt levels driven by the issuance of the HVF III Series 2025 Notes during 2025, partially offset by lower market rates.

Non-vehicle interest expense, net decreased $17 million in the first quarter of 2026 compared to the same period in 2025 due primarily to unrealized gains related to changes in the fair value of the Exchange Features 2029 and the Exchange Feature 2030 and lower market rates, partially offset by higher debt levels.

In the first quarter of 2026, we recorded a tax provision of $30 million, which resulted in an effective tax rate of (9)%. In the first quarter of 2025, we recorded a tax benefit of $82 million, which resulted in an effective tax rate of 16%. The change in taxes in the first quarter of 2026 compared to the same period in 2025 was driven by an increase in valuation allowances on deferred tax assets and lower pretax losses, offset by the non-taxable year-over-year fluctuations in the fair value adjustments of the financial instruments associated with the Exchangeable Notes.

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had income of $33 million and expense of $9 million from the change in fair value of Public Warrants that was incremental to Hertz for the three months ended March 31, 2026 and 2025, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.