HERTZ CORP

Previous wording

This MD&A should be read in conjunction with the MD&A presented in our 2025 Form 10-K together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements,” Part I, Item 1A, "Risk Factors,” and our unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (this "Quarterly Report"), which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements and the accompanying notes including revenue earning vehicle depreciation and various claims and contingencies related to lawsuits, taxes and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and our knowledge of actions that we may undertake in the future in determining the estimates that will affect our unaudited condensed consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe to be appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.

Current wording

This MD&A should be read in conjunction with the MD&A presented in our 2025 Form 10-K together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors," Part I, Item 1A, "Risk Factors,” and our unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2026 (this "Quarterly Report"), which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements and the accompanying notes including revenue earning vehicle depreciation and various claims and contingencies related to lawsuits, taxes, insurance and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and our knowledge of actions that we may undertake in the future in determining the estimates that will affect our unaudited condensed consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe to be appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.

Previous wording

Our revenues are primarily derived from rental and related charges and consist of worldwide vehicle rental revenues from all company-operated vehicle rental operations and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling and electric charging of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees. Also included are collections from customers for vehicle damages, ancillary revenues associated with, but not limited to, retail vehicle sales and certain royalty fees from our franchisees (such fees are approximately 2% of total revenues each period).

Current wording

Our revenues are primarily derived from rental and related charges and consist of worldwide vehicle rental revenues from all company-operated vehicle rental operations and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling and electric charging of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and other products and fees. Also included are collections from customers for vehicle damages, ancillary revenues associated with, but not limited to, retail vehicle sales and certain royalty fees from our franchisees (such fees are less than 3% of total revenues each period).

Previous wording

Three and Six Months Ended June 30, 2026 Operating Overview

Current wording

Three and Nine Months Ended September 30, 2026 Operating Overview

Previous wording

The charts below provide the period-over-period change for several key factors influencing our results for the three and six months ended June 30, 2026 and 2025.

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, 2026 and 2025.

Previous wording

Total revenues increased $211 million in the second quarter of 2026 compared to the same period in 2025, resulting from increases of $180 million and $31 million in our Americas RAC and International RAC segments, respectively. The increase in total revenues was due primarily to improved pricing.

Current wording

Total revenues increased $138 million in the third quarter of 2026 compared to the same period in 2025, resulting from increases of $135 million and $3 million in our Americas RAC and International RAC segments, respectively. The increase in total revenues was due primarily to improved pricing.

Previous wording

Non-vehicle depreciation and amortization was comparable in the second quarter of 2026 to the same period in 2025.

Current wording

Non-vehicle depreciation and amortization was comparable in the third quarter of 2026 to the same period in 2025.

Previous wording

SG&A increased $12 million in the second quarter of 2026 compared to the same period in 2025 driven primarily by increases of $7 million in each of our Americas RAC and International RAC segments, partially offset by a decrease of $3 million in our corporate operations. The increase in SG&A was due primarily to higher advertising spend in our Americas RAC and International RAC segments. SG&A associated with our corporate operations decreased primarily due to a reduction in personnel costs, partially offset by increased restructuring related charges.

Current wording

SG&A increased $16 million in the third quarter of 2026 compared to the same period in 2025 driven primarily by increases of $14 million and $11 million in our corporate operations and Americas RAC segment, respectively, partially offset by a decrease of $9 million in our International RAC segment. The increase in SG&A was due primarily to higher restructuring related charges associated with our corporate operations and increased marketing spend in our Americas RAC segment. SG&A in our International RAC segment decreased primarily due to expenses incurred in the third quarter of 2025 related to an unfavorable litigation ruling.

Previous wording

In the second quarters of 2026 and 2025, we recognized gains of $64 million and $89 million, respectively, on the sales 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. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Current wording

In the third quarter of 2025, we recognized a gain of $39 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. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Previous wording

In the second quarter of 2026, we recorded a tax provision of $7 million, which resulted in an effective tax rate of (24)%. In the second quarter of 2025, we recorded a tax benefit of $22 million, which resulted in an effective tax rate of 11%. The change in taxes in the second quarter of 2026 compared to the same period in 2025 was driven by lower pretax losses and decreases in valuation allowances on deferred tax assets.

Current wording

In the third quarter of 2026, we recorded a tax benefit of $30 million, which resulted in an effective tax rate of (44)%. In the third quarter of 2025, we recorded a tax provision of $50 million, which resulted in an effective tax rate of 21%. The change in taxes in the third quarter of 2026 compared to the same period in 2025 was driven by lower pretax income and decreases in valuation allowances on deferred tax assets.

Previous wording

Total revenues increased $402 million in the first half of 2026 compared to the same period in 2025, resulting primarily from increases of $318 million and $84 million in our Americas RAC and International RAC segments, respectively. The increase in total revenues was due primarily to improved pricing.

Current wording

Total revenues increased $541 million in the nine months ended September 30, 2026 compared to the same period in 2025, resulting primarily from increases of $452 million and $89 million in our Americas RAC and International RAC segments, respectively. The increase in total revenues was due primarily to improved pricing.

Previous wording

Depreciation of revenue earning vehicles and lease charges, net increased $18 million in the first half of 2026 compared to the same period in 2025 with increases of $12 million and $6 million in our International RAC and Americas RAC segments, respectively. Depreciation of revenue earning vehicles and lease charges, net was impacted by an unfavorable $11 million fx impact in the first half of 2026 in our International RAC segment. Depreciation of revenue earning vehicles and lease charges, net was also negatively impacted from a reduction in gains recognized on vehicle disposals in the second quarter of 2026, which included the prioritization of older vehicles and certain models and a higher mix of sales through less favorable disposition channels. The increase was partially offset by a reduction in costs associated with the sales of vehicles resulting in part from disposition channel mix.

Current wording

Depreciation of revenue earning vehicles and lease charges, net increased $29 million in the nine months ended September 30, 2026 compared to the same period in 2025 with increases of $20 million and $9 million in our International RAC and Americas RAC segments, respectively. Depreciation of revenue earning vehicles and lease charges, net was negatively impacted from a reduction in per unit gains recognized on vehicle disposals, partially offset by a reduction in costs associated with the sales of vehicles resulting in part from the disposition channel mix in our Americas RAC segment. Depreciation of revenue earning vehicles and lease charges, net was impacted by an unfavorable $11 million fx impact in the nine months ended September 30, 2026 in our International RAC segment.

Previous wording

DOE increased $60 million in the second quarter of 2026 compared to the same period in 2025, resulting from increases of $51 million and $7 million in our Americas RAC and International RAC segments, respectively. The increase in DOE was due primarily to higher collision, refueling and maintenance costs in our Americas RAC segment. DOE was also impacted by an unfavorable $10 million fx impact in the second quarter of 2026 in our International RAC segment.

Current wording

DOE increased $223 million in the nine months ended September 30, 2026 compared to the same period in 2025 with increases of $169 million and $47 million in our Americas RAC and International RAC segments, respectively. The increase in DOE was due primarily to higher collision, maintenance and variable revenue-related costs in our Americas RAC segment. DOE was also impacted by an unfavorable $34 million fx impact in the nine months ended September 30, 2026 in our International RAC segment.

Previous wording

Non-vehicle depreciation and amortization decreased $7 million in the first half of 2026 compared to the same period in 2025, resulting primarily from our Americas RAC segment. The decrease in non-vehicle depreciation and amortization was due primarily to an increase in assets that were fully depreciated and certain asset retirements in the first quarter of 2025 in our Americas RAC segment.

Current wording

Non-vehicle depreciation and amortization decreased $8 million in the nine months ended September 30, 2026 compared to the same period in 2025, resulting primarily from our Americas RAC segment. The decrease in non-vehicle depreciation and amortization was due primarily to an increase in assets that were fully depreciated in our Americas RAC segment.

Previous wording

SG&A increased $26 million in the first half of 2026 compared to the same period in 2025 driven primarily by increases of $18 million and $15 million in our International RAC and Americas RAC segments, respectively, partially offset by a decrease of $7 million associated with our corporate operations. SG&A increased primarily from higher advertising spend and increased personnel costs in our International RAC segment, partially offset by a reduction in personnel costs associated with our corporate operations. SG&A was also impacted by an unfavorable $8 million fx impact in the first half of 2026.

Current wording

SG&A increased $42 million in the nine months ended September 30, 2026 compared to the same period in 2025, driven primarily by increases of $25 million in our Americas RAC segment, $9 million in our corporate operations and $8 million in our International RAC segment. SG&A increased primarily from higher marketing spend in our Americas RAC segment and higher restructuring related charges associated with our corporate operations, partially offset by a reduction in personnel costs associated with our corporate operations and Americas RAC segment.

Previous wording

Vehicle interest expense, net increased $19 million in the first half of 2026 compared to the same period in 2025 due primarily to increased debt levels and higher average rates in our Americas RAC segment resulting largely from the issuances of HVF III Series 2025 Notes in June and December 2025 and the issuance of HVF III Series 2026 Notes in May 2026.

Current wording

Vehicle interest expense, net increased $21 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to increased debt levels and higher average rates in our Americas RAC segment resulting largely from the issuances of HVF III Series 2025 Notes in 2025 and the issuances of HVF III Series 2026 Notes in May and August 2026.

Previous wording

Non-vehicle interest expense, net decreased $154 million in the first half 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, partially offset by increased debt levels.

Current wording

Non-vehicle interest expense, net decreased $153 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to unrealized gains related to changes in the fair value of the embedded derivatives associated with the Exchangeable Notes Due 2029, the Exchangeable Notes Due 2030 and the Exchangeable First Lien Notes Due 2030, partially offset by increased debt levels.

Previous wording

In the first half of 2026 and 2025, we recognized gains of $64 million and $89 million, respectively, on the sales of certain non-vehicle capital assets during the second quarters of 2026 and 2025 respectively, in our Americas RAC segment, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Current wording

In the nine months ended September 30, 2026 and 2025, we recognized gains of $64 million and $128 million, respectively, on the sales of certain non-vehicle capital assets during the second quarter of 2026 and the second and third quarters of 2025, respectively, in our Americas RAC segment, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Previous wording

In the first half of 2026, we recorded a tax provision of $37 million, which resulted in an effective tax rate of (10)%. In the first half of 2025, we recorded a tax benefit of $104 million, which resulted in an effective tax rate of 15%. The change in tax in the first half of 2026 compared to the same period in 2025 was driven primarily by lower pretax losses and increases in valuation allowances on deferred tax assets.

Current wording

In the nine months ended September 30, 2026, we recorded a tax provision of $7 million, which resulted in an effective tax rate of (3)%. In the nine months ended September 30, 2025, we recorded a tax benefit of $54 million, which resulted in an effective tax rate of 11%. The change in taxes in the nine months ended September 30, 2026 compared to the same period in 2025 was driven primarily by lower pretax losses and increases in valuation allowances on deferred tax assets.

Previous wording

Hertz Global had income of $98 million and $131 million from the change in fair value of Public Warrants that was incremental to Hertz for the second quarter and first half of 2026, 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 $19 million and $150 million from the change in fair value of Public Warrants that was incremental to Hertz for the third quarter and nine months ended September 30, 2026, 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 increased $180 million in the second quarter of 2026 compared to the same period in 2025 due primarily to higher pricing, in which Total RPD increased across all customer channels. Airport revenues comprised 70% of total revenues for the segment in the second quarter of 2026 compared to 69% in the same period in 2025.

Current wording

Total Americas RAC revenues increased $135 million in the third quarter of 2026 compared to the same period in 2025 due primarily to higher pricing, in which Total RPD increased primarily across our leisure and business channels. Airport revenues comprised 70% of total revenues for the segment in the third quarter of 2026 compared to 69% in the same period in 2025.

Previous wording

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $6 million in the first half of 2026 compared to the same period in 2025 primarily due to a reduction in gains recognized on vehicle disposals resulted in large part from our disposition strategy in the second quarter of 2026, which included the prioritization of older vehicles and certain models and a higher mix of sales through less favorable disposition channels. The increase was partially offset by a reduction in costs associated with the sales of vehicles resulting in part from disposition channel mix.

Current wording

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $2 million in the third quarter of 2026 compared to the same period in 2025 due primarily to a reduction in per unit gains on fewer vehicle dispositions, partially offset by a reduction in costs associated with the sales of vehicles resulting in part from our disposition channel mix.

Previous wording

Vehicle interest expense for Americas RAC increased $8 million in the second quarter of 2026 compared to the same period in 2025 due primarily to increased debt levels driven by the issuances of HVF III 2025 Notes in June and December 2025 and the issuance of the HVF III 2026 Notes in May 2026.

Current wording

Vehicle interest expense for Americas RAC increased $5 million in the third quarter of 2026 compared to the same period in 2025 due primarily to higher average rates and increased debt levels driven by the issuance of HVF III 2025 Notes in December 2025 and the issuances of the HVF III 2026 Notes in May and August 2026.

Previous wording

Americas RAC recognized gains of $64 million and $89 million in the second quarters of 2026 and 2025, respectively, on the sales of certain non-vehicle capital assets, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Current wording

Americas RAC recognized a gain of $39 million in the third quarter of 2025 on the sales of certain non-vehicle capital assets, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Previous wording

Total Americas RAC revenues increased $318 million in the first half of 2026 compared to the same period in 2025 due primarily to higher pricing. Total RPD increased across all customer channels in the first half of 2026 compared to the same period in 2025. Airport revenues comprised 69% of total revenues for the segment in the first half of 2026 and 2025.

Current wording

Total Americas RAC revenues increased $452 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to higher pricing. Total RPD increased across all customer channels in the nine months ended September 30, 2026 compared to the same period in 2025. Airport revenues comprised 69% of total revenues for the segment in each of the nine months ended September 30, 2026 and 2025.

Previous wording

Non-vehicle depreciation and amortization decreased $7 million in the first half of 2026 compared to the same period in 2025 due primarily to an increase in assets that were fully depreciated and certain asset retirements in the first quarter of 2025.

Current wording

Non-vehicle depreciation and amortization decreased $7 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to an increase in assets that are fully depreciated.

Previous wording

Vehicle interest expense for Americas RAC increased $16 million in the first half of 2026 compared to the same period in 2025 due primarily to increased debt levels and higher average rates resulting from the issuances of HVF III 2025 Notes in June and December 2025 and the issuance of the HVF III 2026 Notes in May 2026.

Current wording

Vehicle interest expense for Americas RAC increased $21 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to increased debt levels and higher average rates resulting from the issuances of HVF III 2025 Notes in June and December 2025 and the issuance of the HVF III 2026 Notes in May and August 2026.

Previous wording

Americas RAC recognized gains of $64 million and $89 million in the first half of 2026 and 2025, respectively, on the sales of certain non-vehicle capital assets during the second quarters of 2026 and 2025, respectively, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Current wording

Americas RAC recognized gains of $64 million and $128 million in the nine months ended September 30, 2026 and 2025, respectively, on the sales of certain non-vehicle capital assets during the second quarter of 2026 and the second and third quarters of 2025, respectively, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.

Previous wording

Depreciation of revenue earning vehicles and lease charges, net for International RAC in the second quarter of 2026 increased $7 million compared to the same period in 2025 due primarily to per unit losses recognized on vehicle dispositions in the second quarter of 2026 compared to per unit gains recognized in the same period in 2025.

Current wording

Depreciation of revenue earning vehicles and lease charges, net for International RAC in the third quarter of 2026 increased $9 million compared to the same period in 2025 due primarily to per unit losses recognized on vehicle dispositions in the third quarter of 2026 compared to per unit gains recognized in the same period in 2025, partially offset by changes in fleet mix.

Previous wording

SG&A for International RAC in the second quarter of 2026 increased $7 million compared to the same period in 2025 due primarily to higher advertising spend.

Current wording

SG&A for International RAC in the third quarter of 2026 decreased $9 million compared to the same period in 2025 due primarily to expenses incurred in the third quarter of 2025 related to an unfavorable litigation ruling.

Previous wording

Vehicle interest expense for International RAC was comparable in the second quarter of 2026 to the same period in 2025.

Current wording

Vehicle interest expense for International RAC was comparable in the third quarter of 2026 to the same period in 2025.

Previous wording

Total revenues for International RAC increased $84 million in the first half of 2026 compared to the same period in 2025 due primarily to higher pricing. Total RPD increased primarily across our business channels. Total revenues for International RAC were also impacted by a favorable $50 million fx impact in the first half of 2026.

Current wording

Total revenues for International RAC increased $89 million in the nine months ended September 30, 2026 compared to the same period in 2025 due largely to higher pricing and increased volume. Total RPD increased in our business channels, with increased Transaction Days primarily across our leisure channels. Total revenues for International RAC were also impacted by a favorable $50 million fx impact in the nine months ended September 30, 2026.

Previous wording

Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $12 million in the first half of 2026 compared to the same period in 2025 due primarily to an unfavorable $11 million fx impact in the first half of 2026.

Current wording

Depreciation of revenue earning vehicles and lease charges, net for International RAC increased $20 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to per unit losses recognized on vehicle dispositions in the nine months ended September 30, 2026 compared to per unit gains recognized in the same period in 2025, partially offset by changes in fleet mix. Depreciation of revenue earning vehicles and lease charges, net was also impacted by an unfavorable $11 million fx impact in the nine months ended September 30, 2026.

Previous wording

DOE for International RAC increased $42 million in the first half of 2026 compared to the same period in 2025 primarily on volume and from an unfavorable $33 million fx impact in the first half of 2026.

Current wording

DOE for International RAC increased $47 million in the nine months ended September 30, 2026 compared to the same period in 2025 primarily on volume and from an unfavorable $34 million fx impact in the nine months ended September 30, 2026.

Previous wording

SG&A for International RAC increased $18 million in the first half of 2026 compared to the same period in 2025 due primarily to increased personnel costs and higher advertising spend. SG&A for International RAC was also impacted by an unfavorable $8 million fx impact in the first half of 2026.

Current wording

SG&A for International RAC increased $8 million in the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to an unfavorable $8 million fx impact in the nine months ended September 30, 2026.

Previous wording

Vehicle interest expense for International RAC was comparable in the first half of 2026 compared to the same period in 2025.

Current wording

Vehicle interest expense for International RAC was comparable in the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

(3)Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred related primarily to personnel reductions, litigation and closures of underperforming locations.

Current wording

(3)Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred related primarily to consulting fees, personnel reductions, litigation and closures of underperforming locations.

Previous wording

(4)Represents total realized and unrealized (gains) losses on derivative financial instruments, including gains (losses) related to the fair value of the Exchange Features 2029, the Exchange Feature 2030, the First Lien Exchangeable Feature 2030 and the Capped Call Transactions 2030. See Note 10, "Financial Instruments," in Part I, Item 1 of this Quarterly Report. As a result of the revision to Adjusted Corporate EBITDA, the three months ended June 30, 2026 and 2025, include realized losses of $3 million on derivative financial instruments, and the six months ended June 30, 2026 and 2025, include realized losses of $4 million and $7 million, respectively, on derivative financial instruments.

Current wording

(4)Represents total realized and unrealized (gains) losses on derivative financial instruments, including gains (losses) related to the fair value of the Exchange Features 2029, the Exchange Feature 2030, the First Lien Exchangeable Feature 2030 and the Capped Call Transactions 2030. See Note 10, "Financial Instruments," in Part I, Item 1 of this Quarterly Report. As a result of the revision to Adjusted Corporate EBITDA, the three months ended September 30, 2026 and 2025, includes a realized loss of $3 million and a realized gain of $10 million, respectively, on derivative financial instruments, and the nine months ended September 30, 2026 and 2025, includes a realized loss of $7 million and a realized gain of $3 million, respectively, on derivative financial instruments.

Previous wording

(7)Represents the gain recognized on the sales of certain non-vehicle capital assets sold in the second quarter of 2026 and June 2025. See Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

Current wording

(7)Represents the gain recognized on the sales of certain non-vehicle capital assets sold in the second quarter of 2026 and in June and July 2025. See Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

Previous wording

(8)Represents miscellaneous items. For the three months ended June 30, 2026, primarily includes certain IT-related charges, cloud computing costs and certain environmental remediation costs. For the three months ended June 30, 2025, primarily includes certain litigation charges, certain IT-related charges and cloud computing costs. For the six months ended June 30, 2026, primarily includes certain IT-related charges, cloud computing costs and certain environmental remediation costs. For the six months ended June 30, 2025, primarily includes certain litigation charges, certain IT-related charges, cloud computing costs and certain concession-related adjustments.

Current wording

(9)Represents miscellaneous items. For the three months ended September 30, 2026, primarily includes certain IT-related charges, certain environmental remediation costs and cloud computing costs. For the three months ended September 30, 2025, primarily includes an unfavorable litigation ruling and an increase to an existing bankruptcy-related litigation reserve, partially offset by certain other litigation adjustments. For the nine months ended September 30, 2026, primarily includes certain IT-related charges, cloud computing costs and certain environmental remediation costs. For the nine months ended September 30, 2025, primarily includes an increase to an existing bankruptcy-related litigation reserve, certain IT-related charges, an unfavorable litigation ruling, cloud computing costs, certain concession-related adjustments and certain other litigation charges and adjustments.

Previous wording

(9)Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants. See Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.

Current wording

(10)Represents the change in fair value during the reporting period for Hertz Global's outstanding Public Warrants. See Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.