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 $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.

Depreciation of revenue earning vehicles and lease charges, net increased $11 million in the third quarter of 2026 compared to the same period in 2025, primarily attributable to our International RAC segment. Depreciation of revenue earning vehicles and lease charges, net increased 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.

DOE increased $93 million in the third quarter of 2026 compared to the same period in 2025, resulting primarily from an increase of $88 million in our Americas RAC segment. The increase in DOE was due primarily to higher collision, maintenance and variable revenue-related costs.

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

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.

Vehicle interest expense, net was comparable in the third quarter of 2026 to the same period in 2025.

Non-vehicle interest expense, net was comparable in the third quarter of 2026 to the same period in 2025.

In the third quarters of 2026 and 2025, we recognized gains of $6 million and $154 million, respectively, related to the receipt of legal settlement distributions in connection with our participation in a class action settlement, as disclosed in Note 12, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report.

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.

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.

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.

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.

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.

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.

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.

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.

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.

In the nine months ended September 30, 2026 and 2025, we recognized gains of $6 million and $154 million, respectively, related to the receipt of legal settlement distributions in connection with our participation in a class action settlement, as disclosed in Note 12, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly Report.

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.

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.

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

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.

Hertz Global had losses of $6 million and $130 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, 2025, respectively, included in Hertz Global's unaudited condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.