← Back to HTZ filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Hertz Global Holdings, Inc · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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Hertz Global Holdings, Inc. is a holding company and its principal, wholly owned subsidiary is The Hertz Corporation. Hertz Global consolidates Hertz for financial statement purposes, and Hertz comprises approximately the entire balance of Hertz Global’s assets, liabilities and operating cash flows. In addition, Hertz’s operating revenues and operating expenses comprise nearly 100% of Hertz Global’s revenues and operating expenses. As such, Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") that follows herein is for Hertz and also applies to Hertz Global in all material respects, unless otherwise noted. Differences between the operations and results of Hertz and Hertz Global are separately disclosed and explained. We sometimes use the words “we,” “our,” “us” and the “Company” in this MD&A for disclosures that relate to all of Hertz and Hertz Global.
The statements in this MD&A regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. The following MD&A provides information that we believe to be relevant to an understanding of our consolidated financial condition and results of operations. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
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.
In this MD&A, we refer to the following non-GAAP measure and key metrics:
•Adjusted Corporate EBITDA – important non-GAAP measure to management because it allows management to assess the operational performance of our business, exclusive of certain items, and allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows investors to assess our operational performance on the same basis that management uses internally. Adjusted EBITDA, the segment measure of profitability and accordingly a GAAP measure, is calculated exclusive of certain items which are largely consistent with those used in the calculation of Adjusted Corporate EBITDA. Effective in the first quarter of 2026, we revised our definition of Adjusted Corporate EBITDA to adjust for realized (gains) losses from financial instruments, share-based compensation expense and foreign currency (gains) losses in an effort to better reflect management's view of ongoing operations and its assessment of our operational performance. The presentation of the prior period has been recast to conform to the current period presentation.
•Vehicle Utilization – important key metric to management and investors as it is the measurement of the proportion of our vehicles that are being used to generate revenues relative to rentable fleet capacity. Higher Vehicle Utilization means more vehicles are being utilized to generate revenues.
•Depreciation Per Unit Per Month – important key metric to management and investors as depreciation of revenue earning vehicles and lease charges is one of our largest expenses for the vehicle rental business
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
and is driven by the number of vehicles, expected residual values at the expected time of disposal and expected hold period of the vehicles. Depreciation Per Unit Per Month is reflective of how we are managing the costs of our vehicles and facilitates a comparison with other participants in the vehicle rental industry. Effective in the first quarter of 2026, we changed our definition of Average Vehicles to use a daily average of vehicles as opposed to a simple average of vehicles at the beginning and end of a period. We believe this is a better, more accurate measure of our vehicles. Accordingly, the prior period has been recast to reflect this change.
•Total Revenue Per Transaction Day ("Total RPD," also referred to as "pricing") – important key metric to management and investors as it represents a measurement of the changes in underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control.
•Total Revenue Per Unit Per Month ("Total RPU") – important key metric to management and investors as it provides a measure of revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased ("Average Rentable Vehicles"). Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels. Effective in the first quarter of 2026, we changed our definition of Average Rentable Vehicles to use a daily average of rentable vehicles as opposed to a simple average of rentable vehicles at the beginning and end of a period. We believe this is a better, more accurate measure of our rentable vehicles. Accordingly, the prior period has been recast to reflect this change.
•Transaction Days – important key metric to management and investors as it represents the number of revenue generating days ("volume"). It is used as a component to measure Total RPD and Vehicle Utilization. Transaction Days represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.
Our non-GAAP measure and key metrics should not be considered in isolation and should not be considered superior to, or a substitute for, financial measures calculated in accordance with U.S. GAAP. The above non-GAAP measure and key metrics are defined, and the non-GAAP measure is reconciled to its most comparable U.S. GAAP measure, in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.
OUR COMPANY
Hertz Holdings was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns Hertz, Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918.
We operate our vehicle rental business globally from company-owned and franchisee locations in the U.S., Europe, Africa, Asia, Australia, Canada, the Caribbean, Latin America, the Middle East and New Zealand. We also sell vehicles through Hertz Car Sales.
OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT
Our Business
We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands. Our profitability is primarily a function of the volume, mix and pricing of rental transactions and the utilization of vehicles based on availability to rent, the related ownership cost of vehicles and other operating costs. Significant changes in the purchase price or residual values of vehicles or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes. We continue to balance our mix of EVs, non-program vehicles and program vehicles based on market conditions, including residual values. Our business
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
requires significant expenditures for vehicles, and, as such, we require substantial liquidity to finance such expenditures.
Through our "Back-to-Basics" roadmap, we are committed to executing a comprehensive strategy to transform our business, anchored by three financial pillars: disciplined fleet management, revenue optimization and rigorous cost control. Building on our brand strength, global network and fleet management expertise, we remain committed to operational excellence and keeping customers central to everything we do. We have strengthened our fleet by refining our capabilities by sourcing vehicles strategically, deploying them efficiently and monetizing them effectively. Our approach balances disciplined execution today with systematic innovation for tomorrow, leveraging industry experience to adapt to evolving market dynamics and position us for sustainable growth in the future of mobility.
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).
Our expenses primarily consist of:
•direct vehicle and operating expense ("DOE"), primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; and other costs relating to the operation and rental of revenue earning vehicles, such as collision and damage, maintenance, fuel and electric charging costs;
•depreciation expense and lease charges, net relating to revenue earning vehicles, including gains and losses and related costs associated with the disposal of vehicles, including vehicle sales;
•depreciation and amortization expense relating to non-vehicle assets;
•selling, general and administrative expense ("SG&A"), which includes advertising costs and administrative personnel costs, along with costs for information technology and business transformation programs; and
•interest expense, net.
Our vehicle rental operations are a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months ("our peak season") for the majority of countries where we generate our revenues. To accommodate increased demand, we seek to increase our available fleet and staff. As demand declines, we seek to reduce our fleet and staff accordingly. As a result, we strive to maintain a flexible workforce, with a significant number of part-time and seasonal workers. A number of our other major operating costs, including airport concession fees, commissions and vehicle liability expenses, are directly related to revenues or transaction volumes. Certain operating expenses, including real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, and minimum staffing costs, remain fixed and cannot be adjusted for demand.
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Our Reportable Segments
We have identified two reportable segments, which are consistent with our operating segments and organized based on the products and services provided and the geographic areas in which business is conducted, as follows:
•Americas RAC – Rental of vehicles, as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean; and
•International RAC – Rental of vehicles, as well as sales of value-added services, in locations other than the U.S., Canada, Latin America and the Caribbean.
In addition to the above reportable segments, we have corporate operations. We assess performance and allocate resources based upon the financial information for our operating segments.
Three and Six Months Ended June 30, 2026 Operating Overview
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.
(1) Includes impact of foreign currency exchange at average rates ("fx").
(2) Results shown are in constant currency as of December 31, 2025.
(3) The percentages shown in this chart reflect Vehicle Utilization versus period-over-period change.
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For more information on the above, see the discussion of our results on a consolidated basis and by segment that follows herein. In this MD&A, certain amounts in the following tables are denoted in millions. Amounts such as percentages are calculated from the underlying numbers in thousands, and as a result, may not agree to the amount when calculated from the tables in millions.
CONSOLIDATED RESULTS OF OPERATIONS – HERTZ
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
($ in millions) 2026 2025 2026 2025
Total revenues $ 2,396 $ 2,185 10% $ 4,400 $ 3,998 10%
Depreciation of revenue earning vehicles and lease charges, net 487 415 17 968 950 2
Direct vehicle and operating expenses 1,454 1,394 4 2,798 2,668 5
Non-vehicle depreciation and amortization 26 29 (10) 52 59 (13)
Selling, general and administrative expenses 258 246 5 492 465 6
Interest expense, net:
Vehicle 165 152 9 311 292 6
Non-vehicle 94 232 (59) 204 359 (43)
Interest expense, net 259 384 (33) 515 651 (21)
Other (income) expense, net 3 7 (62) 1 11 (86)
(Gain) from the sale of non-vehicle capital assets (64) (89) 28 (64) (89) 28
Income (loss) before income taxes (27) (201) 87 (362) (717) 50
Income tax (provision) benefit (7) 22 NM (37) 104 NM
Net income (loss) $ (34) $ (179) 81 $ (399) $ (613) 35
Adjusted Corporate EBITDA(a) $ 81 $ 18 NM $ (80) $ (284) 72
NM - Not meaningful
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.
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
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.
Depreciation of revenue earning vehicles and lease charges, net increased $72 million in the second quarter of 2026 compared to the same period in 2025, of which $66 million was attributed to our Americas RAC segment.
Depreciation of revenue earning vehicles and lease charges, net increased due primarily to reduced gains and residual variability. The 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.
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
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
segment. DOE was also impacted by an unfavorable $10 million fx impact in the second quarter of 2026 in our International RAC segment.
Non-vehicle depreciation and amortization was comparable in the second quarter of 2026 to the same period in 2025.
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.
Vehicle interest expense, net increased $13 million in the second quarter of 2026 compared to the same period in 2025 due primarily to our Americas RAC segment resulting largely from increased debt levels driven by 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.
Non-vehicle interest expense, net decreased $138 million in the second 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, partially offset by increased debt levels.
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.
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.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
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.
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.
DOE increased $129 million in the first half of 2026 compared to the same period in 2025 with increases of $83 million and $42 million in our Americas RAC and International RAC segments, respectively. The increase in DOE was due primarily to higher collision and maintenance costs in our Americas RAC segment and as a result of increased volume. DOE was also impacted by an unfavorable $33 million fx impact in the first half of 2026 in our International RAC segment.
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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.
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.
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.
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.
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.
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.
CONSOLIDATED RESULTS OF OPERATIONS – HERTZ GLOBAL
The above discussion for Hertz also applies to Hertz Global.
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.
Hertz Global had losses of $115 million and $124 million from the change in fair value of Public Warrants that were
incremental to Hertz for the second quarter and first half of 2025, respectively, included in Hertz Global's unaudited
condensed consolidated statements of operations in Part I, Item 1 of this Quarterly Report.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT
Americas RAC
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
($ in millions, except as noted) 2026 2025 2026 2025
Total revenues $ 1,918 $ 1,738 10% $ 3,546 $ 3,228 10%
Depreciation of revenue earning vehicles and lease charges, net $ 391 $ 325 20 $ 793 $ 787 1
Direct vehicle and operating expenses $ 1,183 $ 1,132 5 $ 2,281 $ 2,198 4
Direct vehicle and operating expenses as a percentage of total revenues 62 % 65 % 64 % 68 %
Non-vehicle depreciation and amortization $ 21 $ 23 (6) $ 42 $ 49 (15)
Selling, general and administrative expenses $ 139 $ 132 6 $ 261 $ 246 6
Selling, general and administrative expenses as a percentage of total revenues 7 % 8 % 7 % 8 %
Vehicle interest expense $ 138 $ 129 6 $ 262 $ 246 6
Adjusted EBITDA $ 88 $ 43 NM $ (15) $ (193) 92
Transaction Days (in thousands)(b) 30,895 30,935 — 59,458 58,693 1
Average Vehicles (in whole units)(f) 429,465 436,720 (2) 424,647 425,306 —
Average Rentable Vehicles (in whole units)(c) 410,849 407,913 1 405,972 396,552 2
Vehicle Utilization(c) 83 % 83 % 81 % 82 %
Total RPD (in dollars)(d) $ 62.11 $ 56.21 10 $ 59.65 $ 55.05 8
Total RPU Per Month (in whole dollars)(e) $ 1,557 $ 1,421 10 $ 1,456 $ 1,358 7
Depreciation Per Unit Per Month (in whole dollars)(f) $ 304 $ 248 22 $ 311 $ 309 1
Percentage of program vehicles as of period end 14 % 7 % 14 % 7 %
NM - Not meaningful
Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
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.
Depreciation of revenue earning vehicles and lease charges, net for Americas RAC increased $66 million in the second quarter of 2026 compared to the same period in 2025 due primarily to reduced gains and residual variability. The 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.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
DOE for Americas RAC increased $51 million in the second quarter of 2026 compared to the same period in 2025 due primarily to higher collision, refueling and maintenance costs.
Non-vehicle depreciation and amortization was comparable in the second quarter of 2026 to the same period in 2025.
SG&A for Americas RAC increased $7 million in the second quarter of 2026 compared to the same period in 2025 due primarily to increased advertising spend.
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.
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.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
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.
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.
DOE for Americas RAC increased $83 million in the first half of 2026 compared to the same period in 2025 due primarily to higher collision and maintenance costs.
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.
SG&A for Americas RAC increased $15 million in the first half of 2026 compared to the same period in 2025 due primarily to higher advertising spend.
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.
Americas RAC recognized gains of $64 million and $89 million in the first half of 2026 and 2025, respectively, on the sales of certain non-vehicle capital assets during the second quarters of 2026 and 2025, respectively, as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report. We expect to continue to evaluate and complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets through the end of 2026.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
International RAC
Three Months Ended June 30, % Change Six Months Ended June 30, % Change
($ in millions, except as noted) 2026 2025 2026 2025
Total revenues $ 478 $ 447 7% $ 854 $ 770 11%
Depreciation of revenue earning vehicles and lease charges, net $ 96 $ 90 7 $ 175 $ 163 7
Direct vehicle and operating expenses $ 270 $ 263 2 $ 512 $ 470 9
Direct vehicle and operating expenses as a percentage of total revenues 56 % 59 % 60 % 61 %
Non-vehicle depreciation and amortization $ 4 $ 4 17 $ 7 $ 7 2
Selling, general and administrative expenses $ 64 $ 57 13 $ 122 $ 104 18
Selling, general and administrative expenses as a percentage of total revenues 13 % 13 % 14 % 13 %
Vehicle interest expense $ 27 $ 23 14 $ 49 $ 46 7
Adjusted EBITDA $ 47 $ 38 23 $ 45 $ 28 60
Transaction Days (in thousands)(b) 7,751 7,760 — 14,082 13,904 1
Average Vehicles (in whole units)(f) 109,653 108,242 1 101,993 99,951 2
Average Rentable Vehicles (in whole units)(c) 106,986 105,758 1 99,625 97,842 2
Vehicle Utilization(c) 80 % 81 % 78 % 78 %
Total RPD (in dollars)(d) $ 61.49 $ 59.63 3 $ 60.42 $ 58.59 3
Total RPU Per Month (in whole dollars)(e) $ 1,485 $ 1,458 2 $ 1,423 $ 1,388 3
Depreciation Per Unit Per Month (in whole dollars)(f) $ 294 $ 287 2 $ 286 $ 290 (1)
Percentage of program vehicles as of period end 11 % 26 % 11 % 26 %
Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
Total revenues for International RAC increased $31 million in the second quarter of 2026 compared to the same period in 2025 due to higher pricing. Total RPD increased primarily across our business channels. Total revenues for International RAC were also impacted by a favorable $17 million fx impact in the second quarter of 2026.
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.
DOE for International RAC increased $7 million in the second quarter of 2026 compared to the same period in 2025 resulting primarily from an unfavorable $10 million fx impact in the second quarter of 2026.
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.
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Vehicle interest expense for International RAC was comparable in the second quarter of 2026 to the same period in 2025.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
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.
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.
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.
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.
Vehicle interest expense for International RAC was comparable in the first half of 2026 compared to the same period in 2025.
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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Footnotes to the Results of Operations and Selected Operating Data by Segment Tables
(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; net (gains) losses from financial instruments; share-based compensation expense; foreign currency (gains) losses; 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 reconciliation to the most comparable U.S. GAAP measure is presented below.
Effective in the first quarter of 2026, we revised our definition of Adjusted Corporate EBITDA to adjust for realized (gains) losses from financial instruments, share-based compensation expense and foreign currency (gains) losses. The update to Adjusted Corporate EBITDA is to better reflect management's view of ongoing operations and its assessment of our operational performance. The presentation of the prior periods has been recast to conform to the current period presentation.
Hertz
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2026 2025 2026 2025
Net income (loss) $ (34) $ (179) $ (399) $ (613)
Adjustments:
Income tax provision (benefit) 7 (22) 37 (104)
Non-vehicle depreciation and amortization 26 29 52 59
Non-vehicle debt interest, net(1) 148 127 285 248
Vehicle debt-related charges(2) 10 12 22 23
Restructuring and restructuring related charges(3) 8 4 16 7
Net (gains) losses on financial instruments(4) (51) 107 (80) 111
Share-based compensation expense(5) 20 16 37 31
Foreign currency (gains) losses(6) — (2) — 2
Gain on sale of non-vehicle capital assets(7) (64) (89) (64) (89)
Other items(8) 11 15 14 41
Adjusted Corporate EBITDA $ 81 $ 18 $ (80) $ (284)
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Hertz Global
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2026 2025 2026 2025
Net income (loss) $ 64 $ (294) $ (269) $ (737)
Adjustments:
Income tax provision (benefit) 7 (22) 36 (104)
Non-vehicle depreciation and amortization 26 29 52 59
Non-vehicle debt interest, net(1) 148 127 285 248
Vehicle debt-related charges(2) 10 12 22 23
Restructuring and restructuring related charges(3) 8 4 16 7
Net (gains) losses on financial instruments(4) (51) 107 (80) 111
Share-based compensation expense(5) 20 16 37 31
Foreign currency (gains) losses(6) — (2) — 2
Gain on sale of non-vehicle capital assets(7) (64) (89) (64) (89)
Change in fair value of Public Warrants(9) (98) 115 (131) 124
Other items(8) 11 15 16 41
Adjusted Corporate EBITDA $ 81 $ 18 $ (80) $ (284)
(1)Excludes 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, which are included in footnote 4 below.
(2)Represents vehicle debt-related charges related to the amortization of deferred financing costs and debt discounts and premiums.
(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.
(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.
(5)Represents total employee compensation expense associated with grants made under the 2021 Omnibus Plan. See Note 9, "Stock-Based Compensation," in Part I, Item 1 of this Quarterly Report.
(6)Represents (gains) losses recognized on the remeasurement and settlement of foreign currency transactions, excluding gains (losses) related to foreign currency derivative financial instruments, which are included in footnote 4 above.
(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.
(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.
(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.
(b)Transaction Days represents the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(c)Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days. Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period. Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels and is determined using a daily average of such vehicles. Effective in the first quarter of 2026, we changed our definition of Average Rentable Vehicles to use a daily average of rentable vehicles as opposed to a simple average of rentable vehicles at the beginning and end of a period. We believe this is a better, more accurate measure of our rentable vehicles. Accordingly, the prior periods have been recast to reflect this change.
Americas RAC International RAC
Three Months Ended June 30,
2026 2025 2026 2025
Transaction Days (in thousands) 30,895 30,935 7,751 7,760
Average Rentable Vehicles (in whole units) 410,849 407,913 106,986 105,758
Number of days in period (in whole units) 91 91 91 91
Available Car Days (in thousands) 37,387 37,121 9,734 9,622
Vehicle Utilization 83 % 83 % 80 % 81 %
Americas RAC International RAC
Six Months Ended June 30,
2026 2025 2026 2025
Transaction Days (in thousands) 59,458 58,693 14,082 13,904
Average Rentable Vehicles (in whole units) 405,972 396,552 99,625 97,842
Number of days in period (in whole units) 181 181 181 181
Available Car Days (in thousands) 73,486 71,792 18,044 17,722
Vehicle Utilization 81 % 82 % 78 % 78 %
(d)Total RPD is calculated as revenues with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates ("Total Revenues - adjusted for foreign currency"), divided by the total number of Transaction Days. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends.
Americas RAC International RAC
Three Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Revenues $ 1,918 $ 1,738 $ 478 $ 447
Foreign currency adjustment(1) 1 1 (1) 16
Total Revenues - adjusted for foreign currency $ 1,919 $ 1,739 $ 477 $ 463
Transaction Days (in thousands) 30,895 30,935 7,751 7,760
Total RPD (in dollars) $ 62.11 $ 56.21 $ 61.49 $ 59.63
Americas RAC International RAC
Six Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Revenues $ 3,546 $ 3,228 $ 854 $ 770
Foreign currency adjustment(1) 1 3 (3) 45
Total Revenues - adjusted for foreign currency $ 3,547 $ 3,231 $ 851 $ 815
Transaction Days (in thousands) 59,458 58,693 14,082 13,904
Total RPD (in dollars) $ 59.65 $ 55.05 $ 60.42 $ 58.59
(1)Based on December 31, 2025 foreign currency exchange rates for all periods presented.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(e) Total RPU Per Month is calculated as Total Revenues - adjusted for foreign currency divided by the Average Rentable Vehicles in each period and then divided by the number of months in the period reported.
Americas RAC International RAC
Three Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Total Revenues - adjusted for foreign currency $ 1,919 $ 1,739 $ 477 $ 463
Average Rentable Vehicles (in whole units) 410,849 407,913 106,986 105,758
Total revenue per unit (in whole dollars) $ 4,670 $ 4,262 $ 4,455 $ 4,375
Number of months in period (in whole units) 3 3 3 3
Total RPU Per Month (in whole dollars) $ 1,557 $ 1,421 $ 1,485 $ 1,458
Americas RAC International RAC
Six Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Total Revenues - adjusted for foreign currency $ 3,547 $ 3,231 $ 851 $ 815
Average Rentable Vehicles (in whole units) 405,972 396,552 99,625 97,842
Total revenue per unit (in whole dollars) $ 8,736 $ 8,148 $ 8,541 $ 8,326
Number of months in period (in whole units) 6 6 6 6
Total RPU Per Month (in whole dollars) $ 1,456 $ 1,358 $ 1,423 $ 1,388
(f) Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges, per vehicle per month and is calculated as depreciation of revenue earning vehicles and lease charges, net, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates, divided by the Average Vehicles in each period, which is determined using a daily average of vehicles, and then dividing by the number of months in the period reported. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends. Effective in the first quarter of 2026, we changed our definition of Average Vehicles to use a daily average of vehicles as opposed to a simple average of vehicles at the beginning and end of a period. We believe this is a better, more accurate measure of our vehicles. Accordingly, the prior periods have been recast to reflect this change.
Americas RAC International RAC
Three Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Depreciation of revenue earning vehicles and lease charges, net $ 391 $ 325 $ 96 $ 90
Foreign currency adjustment(1) — — 1 3
Adjusted depreciation of revenue earning vehicles and lease charges $ 391 $ 325 $ 97 $ 93
Average Vehicles (in whole units) 429,465 436,720 109,653 108,242
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) $ 911 $ 745 $ 881 $ 860
Number of months in period (in whole units) 3 3 3 3
Depreciation Per Unit Per Month (in whole dollars) $ 304 $ 248 $ 294 $ 287
(1)Based on December 31, 2025 foreign currency exchange rates for all periods presented.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Americas RAC International RAC
Six Months Ended June 30,
($ in millions, except as noted) 2026 2025 2026 2025
Depreciation of revenue earning vehicles and lease charges, net $ 793 $ 787 $ 175 $ 163
Foreign currency adjustment(1) — 1 — 11
Adjusted depreciation of revenue earning vehicles and lease charges $ 793 $ 788 $ 175 $ 174
Average Vehicles (in whole units) 424,647 425,306 101,993 99,951
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) $ 1,868 $ 1,852 $ 1,715 $ 1,739
Number of months in period (in whole units) 6 6 6 6
Depreciation Per Unit Per Month (in whole dollars) $ 311 $ 309 $ 286 $ 290
(1)Based on December 31, 2025 foreign currency exchange rates for all periods presented.
LIQUIDITY AND CAPITAL RESOURCES
Our U.S. and international operations are funded by cash provided by operating activities and by extensive financing arrangements in the U.S. and internationally.
Cash and Cash Equivalents
As of June 30, 2026, we had $628 million of cash and cash equivalents and $673 million of restricted cash and cash equivalents. As of June 30, 2026, $209 million of cash and cash equivalents and $63 million of restricted cash and cash equivalents were held by our subsidiaries outside of the U.S. We continue to assert no permanent reinvestment of foreign earnings that give rise to excess cash, provided such cash can be remitted in a tax efficient manner.
We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations for the next twelve months and for the foreseeable future thereafter.
Cash Flows – Hertz
As of June 30, 2026 and December 31, 2025, Hertz had cash and cash equivalents of $628 million and $565 million, respectively, and restricted cash and cash equivalents of $673 million and $602 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for the periods shown:
Six Months Ended June 30,
(In millions) 2026 2025 $ Change
Cash provided by (used in):
Operating activities $ 401 $ 598 $ (197)
Investing activities (2,069) (1,564) (505)
Financing activities 1,812 933 879
Effect of exchange rate changes (10) 30 (40)
Net change in cash and cash equivalents and restricted cash and cash equivalents $ 134 $ (3) $ 137
During the first half of 2026, cash flows from operating activities decreased $197 million period over period due primarily to a $267 million change in net income, as adjusted for non-cash and non-operating items and a $464 million change in working capital accounts. Cash flows from working capital accounts decreased due primarily
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
to the payment of an existing bankruptcy-related litigation reserve in the first quarter of 2026 and an increase in value added tax receivables due primarily to timing of refunds.
Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the first half of 2026, there was a $505 million increase in the cash used in investing activities period over period due primarily to a $488 million increase in revenue earning vehicle expenditures, net. The increase in cash used by revenue earning vehicle expenditures, net, primarily resulted from increased vehicle acquisition costs.
Net financing cash inflows were $1.8 billion in the first half of 2026 compared to $933 million in the 2025 period. The $879 million increase in cash inflows is due primarily to an increase of $571 million in net proceeds from non-vehicle debt largely resulting from the issuance of the Exchangeable First Lien Notes Due 2030 in the second quarter of 2026 and higher outstanding borrowings on the First Lien RCF in the first half of 2026 compared to the same period in 2025. Cash inflows were also positively impacted from net vehicle debt of $326 million due in part to the issuance of the HVF III Series 2026 Notes in the second quarter of 2026 and additional net borrowings on the HVF III Series 2021-A Notes.
Cash Flows – Hertz Global
As of June 30, 2026 and December 31, 2025, Hertz Global had cash and cash equivalents of $631 million and $565 million, respectively, and restricted cash and cash equivalents of $673 million and $602 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and cash equivalents for Hertz Global for the periods shown:
Six Months Ended June 30,
(In millions) 2026 2025 $ Change
Cash provided by (used in):
Operating activities $ 401 $ 597 $ (196)
Investing activities (2,069) (1,564) (505)
Financing activities 1,815 933 882
Effect of exchange rate changes (10) 30 (40)
Net change in cash and cash equivalents and restricted cash and cash equivalents $ 137 $ (4) $ 141
Fluctuations in operating, investing and financing cash flows from period to period were due to the same factors as those disclosed for Hertz above, with the exception of any cash inflows or outflows related to the issuance or repurchase of our common stock and the exercise of Public Warrants, as applicable. Also see Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," in Part I, Item 1 of this Quarterly Report.
ATM Equity Offering Program
In May 2025, Hertz Global filed a Form S-3 Registration Statement as well as a prospectus supplement covering the offering, issuance and sale of up to a maximum aggregate offering price of $250 million shares of Hertz Global common stock par value $0.01 per share that may be issued and sold from time to time under the ATM Program. Between April 1, 2026 and June 30, 2026, approximately 524,000 shares of Hertz Global common stock were sold under the ATM Program for net proceeds of approximately $3 million. As of June 30, 2026, there remains approximately $247 million shares of Hertz Global common stock to be issued under the ATM Program.
Debt Financing
Refer to Note 5, "Debt," in Part I, Item 1 of this Quarterly Report for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of June 30, 2026.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Cash paid for interest on vehicle debt during the first half of 2026 and 2025 was $294 million and $255 million, respectively. The $39 million increase in cash paid for vehicle debt interest is due primarily to issuances of HVF III Series 2025 Notes during 2025, partially offset by lower outstanding borrowings and lower interest rate under the HVF III Series 2021-A Notes. Cash paid for interest on non-vehicle debt during the first half of 2026 and 2025 was $219 million and $212 million, respectively. The $7 million increase in cash paid for non-vehicle debt interest is due primarily to higher outstanding borrowings under the First Lien RCF in the first half of 2026 compared to the same period in 2025 and initial payment of semi-annual interest for the Exchangeable Notes Due 2030, partially offset by higher payments in the first quarter of 2025 resulting from the additional issuance of the First Lien Senior Notes in December 2024.
Our available corporate liquidity, which excludes unused commitments under our vehicle debt, was as follows:
(In millions) June 30, 2026 December 31, 2025
Cash and cash equivalents $ 628 $ 565
Availability under the First Lien RCF 356 924
Corporate liquidity $ 984 $ 1,489
Non-Vehicle Debt
Exchangeable Notes Due 2029
In June 2024, Hertz issued $250 million in aggregate principal amount of the Exchangeable Notes Due 2029. The Exchangeable Notes Due 2029 bear PIK interest payable on the Semi-annual PIK Event, where PIK interest increases the principal amount of the Exchangeable Notes Due 2029 upon each Semi-annual PIK Event. In connection with Semi-annual PIK Event in the first quarter of 2026, we increased the principal amount of the Exchangeable Notes Due 2029 by $11 million.
Additionally, for each Semi-annual PIK Event, the Company bifurcates the Exchange Feature 2029 PIK from the Exchangeable Notes Due 2029 for accounting purposes utilizing applicable guidance. As a result of the Semi-annual PIK Event in the first quarter of 2026, we recognized an additional debt discount of $4 million within Non-vehicle debt in the accompanying unaudited consolidated balance sheet as of June 30, 2026 in Part I, Item 1 of this Quarterly Report, representing its initial fair value. Refer to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report for further details.
The net carrying amount of the Exchangeable Notes Due 2029 consists of the following:
(In millions) June 30, 2026 December 31, 2025
Principal $ 250 $ 250
Non-cash PIK interest 32 21
Unamortized debt discounts and issuance costs(1) (10) (12)
Unamortized discounts associated with the Exchange Features 2029(2) (64) (67)
(Gain) loss on fair value of the Exchange Features 2029(3) 26 78
Net carrying amount $ 234 $ 270
(1) Debt issuance costs are amortized to non-vehicle interest expense over the term of the Exchangeable Notes Due 2029 using the effective interest method.
(2) Reflects the unamortized discount associated with the Exchange Features 2029, as disclosed in Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report, net of accretive interest which is amortized to non-vehicle interest expense over the term of the Exchangeable Notes Due 2029 using the effective interest method.
(3) Refer also to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Interest expense recognized for the Exchangeable Notes Due 2029 consists of the following:
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2026 2025 2026 2025
Non-cash PIK interest $ 6 $ 5 $ 11 $ 10
Amortization of debt discounts and debt issuance costs 1 1 2 1
Accretive interest 4 2 7 4
(Gain) loss on fair value of the Exchange Features 2029(1) (37) 105 (56) 111
Total $ (26) $ 113 $ (36) $ 126
(1) Refer also to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
Exchangeable Notes Due 2030
In September 2025, Hertz issued $425 million in aggregate principal amount of Exchangeable Notes Due 2030. The Exchangeable Notes Due 2030 bear interest payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2026.
The net carrying amount of the Exchangeable Notes Due 2030 consists of the following:
(In millions) June 30, 2026 December 31, 2025
Principal $ 425 $ 425
Unamortized debt issuance costs(1) (18) (20)
Unamortized discounts associated with the Exchange Feature 2030(2) (91) (99)
Fair value of the Exchange Feature 2030(3) 21 54
Net carrying amount $ 337 $ 360
(1) Debt issuance costs are amortized to non-vehicle interest expense over the term of the Exchangeable Notes Due 2030 using the effective interest method.
(2) Reflects the unamortized discount associated with the Exchange Feature 2030, as disclosed in Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report, net of accretive interest which is amortized to non-vehicle interest expense over the term of the Exchangeable Notes Due 2030 using the effective interest method.
(3) Refer also to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
Interest expense recognized for the Exchangeable Notes Due 2030 consists of the following:
Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2026 2025 2026 2025
Contractual interest expense $ 5 $ — $ 12 $ —
Amortization of debt issuance costs 1 — 2 —
Accretive interest 4 — 8 —
(Gain) loss on fair value of the Exchange Feature 2030(1) (19) — (33) —
Total $ (9) $ — $ (11) $ —
(1) Refer also to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
Exchangeable First Lien Notes Due 2030
In June 2026, Hertz issued $350 million in aggregate principal amount of Exchangeable First Lien Notes Due 2030. Hertz also granted the initial purchasers the Greenshoe Option, for settlement within a limited period of time from the issuance of the Exchangeable First Lien Notes Due 2030, up to an additional $50 million aggregate principal amount of Exchangeable First Lien Notes Due 2030. In July 2026, Hertz issued an additional $30 million aggregate
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
principal amount of Exchangeable First Lien Notes Due 2030 pursuant to the Greenshoe Option. The remainder of the Greenshoe Option has expired.
The Exchangeable First Lien Notes Due 2030 bear interest payable semi-annually in arrears on January 1 and July 1 of each year, beginning in January 2027. Each payment of interest will consist of 3.375% per annum of such interest to be paid in cash and 3.375% per annum of such interest to be paid in the form of PIK interest. The Exchangeable First Lien Notes Due 2030 will mature on July 1, 2030, unless earlier repurchased, redeemed or exchanged in accordance with their terms prior to maturity.
The Exchangeable First Lien Notes Due 2030 will be exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Exchangeable First Lien Notes Due 2030 will be exchangeable by holders into shares of Hertz Global common stock, cash or a combination of Hertz Global common stock and cash, at Hertz's election. The aggregate number of shares of Hertz Global common stock that may be issued upon exchange of the Exchangeable First Lien Notes Due 2030 may not exceed 63,457,320 shares, unless and until the shareholders of Hertz Global approve the issuance of the Exchangeable First Lien Notes Due 2030. The exchange rate will initially be 279.5248 shares per $1,000 principal amount of Exchangeable First Lien Notes Due 2030, corresponding to an initial exchange price of approximately $3.58 per share of Hertz Global common stock. The exchange rate and exchange price will be subject to adjustment upon the occurrence of certain events.
Holders of the Exchangeable First Lien Notes Due 2030 will have the right to require Hertz to repurchase all or a portion of their Exchangeable First Lien Notes Due 2030 at 100% of the capitalized principal amount of the Exchangeable First Lien Notes Due 2030 plus accrued and unpaid cash interest up to, but excluding, the date of such repurchase, upon the occurrence of certain corporate events constituting a “fundamental change” as defined in the indenture governing the Exchangeable First Lien Notes Due 2030. Hertz may not redeem the Exchangeable First Lien Notes Due 2030 prior to January 6, 2029. On or after January 6, 2029 and on or prior to the 31st scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of Hertz Global common stock has been at least 130% of the exchange price for the Exchangeable First Lien Notes Due 2030 for certain specified periods, and certain other conditions are satisfied, Hertz may redeem all or any portion (subject to certain limitations) of the Exchangeable First Lien Notes Due 2030. The redemption will be at a cash redemption price equal to the capitalized principal amount of the Exchangeable First Lien Notes Due 2030 to be redeemed plus accrued and unpaid cash interest to, but excluding, the date of such redemption.
Upon issuance, we bifurcated the First Lien Exchangeable Feature 2030 from the Exchangeable First Lien Notes Due 2030 for accounting purposes utilizing applicable guidance. As a result, we recognized a debt discount of $115 million within Non-vehicle debt in the accompanying unaudited consolidated balance sheet as of June 30, 2026 in Part I, Item 1 of this Quarterly Report, representing the initial fair value of the First Lien Exchangeable Feature 2030. As of June 30, 2026, the fair value of the First Lien Exchangeable Feature 2030 was $110 million. Refer to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report for further details.
Concurrently with the issuance of the Exchangeable First Lien Notes Due 2030, Hertz Global agreed to lend the Share Borrower a total of 37,037,037 shares of Hertz Global common stock pursuant to the Share Lending Agreement to help facilitate the successful completion of the Exchangeable First Lien Notes Due 2030 offering. Hertz Global received a one-time nominal lending fee for the Borrowed Shares equal to the par value of Hertz Global's common stock. The Share Borrower was obligated to furnish collateral equal in value to the market value of the Borrowed Shares as of the closing date of the Share Lending Agreement. The share loan under the Share Lending Agreement will terminate, and the Borrowed Shares must be returned to Hertz Global within five business days of such termination (subject to the Share Borrower's right to extend the settlement due date of the Borrowed Shares in certain circumstances, under the following circumstances: (i) the Share Borrower may terminate all or any portion of the loan at any time and (ii) on the earliest to occur of (a) October 1, 2030; (b) the date that is three months after the first date following the closing date of the Exchangeable First Lien Notes Due 2030 offering when none of the Exchangeable First Lien Notes Due 2030 remains outstanding; and (c) the date, if any, on which the Share Lending Agreement is terminated by the parties upon mutual agreement or by one party upon a default with
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THE HERTZ CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
respect to the other party. Cash repayment is not required by the Share Lending Agreement; however, it may be elected in certain instances involving default, legal prohibitions or a court order.
The Share Lending Agreement qualified for equity classification, and, as such, Hertz Global recognized a debt issuance cost of $85 million, representing the initial fair value of the Share Lending Agreement, as determined by the market value of the Borrowed Shares as of the closing date of the Share Lending Agreement. As of June 30, 2026, the fair value of the Borrowed Shares was $84 million, as determined by the market value of the Borrowed Shares at June 30, 2026. The shares borrowed under the Share Lending Agreement are excluded from the calculation of basic and diluted earnings (loss) per share. Refer to Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," in Part I, Item 1 of this Quarterly Report for further details.
The net carrying amount of the Exchangeable First Lien Notes Due 2030 consists of the following as of:
(In millions) June 30, 2026
Principal $ 350
Unamortized debt discounts and issuance costs(1) (12)
Unamortized discounts associated with the First Lien Exchangeable Feature 20302) (115)
Fair value of the First Lien Exchangeable Feature 2030(3) 110
Net carrying amount - Hertz 333
Unamortized debt issuance cost - Share Lending Agreement(4) (85)
Net carrying amount - Hertz Global $ 248
(1) Debt issuance costs, exclusive of the Share Lending Agreement, are amortized to non-vehicle interest expense over the term of the Exchangeable First Lien Notes Due 2030 using the effective interest method.
(2) Reflects the unamortized discount associated with the First Lien Exchangeable Feature 2030, net of accretive interest which is amortized to non-vehicle interest expense over the term of the Exchangeable First Lien Notes Due 2030 using the effective interest method.
(3) As further disclosed in Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report.
(4) The fair value of the Share Lending Agreement recognized as a debt issuance cost of the Exchangeable First Lien Notes Due 2030 is amortized to non-vehicle interest expense over the term of the Exchangeable First Lien Notes Due 2030 using the effective interest method.
During the three and six months ended June 30, 2026, we recognized a gain of $5 million from the change in fair value of the First Lien Exchangeable Feature 2030. Refer to Note 11, "Fair Value Measurements," in Part I, Item 1 of this Quarterly Report for further details.
Letters of Credit
As of June 30, 2026, there were outstanding standby letters of credit totaling $1.1 billion comprised primarily of $493 million issued under the First Lien RCF, $326 million of various Standby LCs and $245 million issued under the Term C Loan. As of June 30, 2026, no capacity remained to issue additional letters of credit under the Term C Loan. Such letters of credit have been issued primarily to provide credit enhancement for our asset-backed securitization facilities and to support our insurance programs, as well as to support our vehicle rental concessions and leaseholds. As of June 30, 2026, none of the issued letters of credit have been drawn upon.
The Standby LCs provide that, at Hertz's option and under the terms of the facilities, Hertz may request letters of credit be issued for itself and on behalf of certain of its subsidiaries up to the committed amounts of the facilities. In the first half of 2026, Hertz increased the amounts committed under its Standby LCs by approximately $300 million, in which approximately $200 million occurred in February 2026.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Vehicle Debt
Americas RAC
HVF III U.S. Vehicle Variable Funding Notes
In April 2026, HVF III, a wholly owned, special-purpose and bankruptcy-remote subsidiary of Hertz, amended the HVF III Series 2021-A Notes to extend the maturity date of the Class A Notes to May 2028. The maximum principal of the Class A Notes is $3.2 billion until May 2027 and thereafter is $3.0 billion until May 2028, after giving effect to the terms of the amendment.
HVF III U.S. Vehicle Medium Term Notes
In April 2026, HVF III issued Class E notes for certain of the outstanding series of notes under the HVF III MTN program in an aggregate principal amount of $221 million as detailed in the table below.
($ in millions) Principal Interest Rate Maturity
Class E Notes
HVF III Series 2022-5 $ 17 10.67 % 9/2027
HVF III Series 2023-2 14 10.99 % 9/2028
HVF III Series 2023-4 24 11.48 % 3/2029
HVF III Series 2024-1 18 10.95 % 1/2028
HVF III Series 2024-2 18 11.99 % 1/2030
HVF III Series 2025-1 24 10.99 % 9/2028
HVF III Series 2025-2 24 12.26 % 9/2030
HVF III Series 2025-3 18 11.47 % 12/2028
HVF III Series 2025-4 15 12.28 % 12/2030
HVF III Series 2025-5 22 11.72 % 5/2029
HVF III Series 2025-6 27 12.54 % 5/2031
Total Class E Notes $ 221
In May 2026, HVF III issued the Series 2026-1 Notes (Class A, Class B, Class C, Class D and Class E) and Series 2026-2 Notes (Class A, Class B, Class C, Class D and Class E) each in aggregate principal amount of $500 million with maturity dates of November 2029 and November 2031, respectively.
Hertz Canadian Securitization
In April 2026, TCL Funding Limited Partnership, a bankruptcy-remote, indirect, wholly owned and special-purpose subsidiary of Hertz, amended the Hertz Canadian Securitization to increase the aggregate maximum borrowings from CAD$475 million to CAD$625 million until November 2026, reverting to CAD$475 million thereafter until the extended maturity date of April 2028.
International RAC
European ABS
In April 2026, IFF No. 2, an indirect, special-purpose subsidiary of Hertz, amended the European ABS, inclusive of Class A Notes, Class B Notes and Class C Notes, to extend the maturity date to April 2028. The aggregate maximum principal of the European ABS is €1.4 billion to April 2027 and thereafter is €1.1 billion until April 2028, after giving effect to terms of the amendment.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Australian Securitization
In July 2026, HA Fleet Pty Limited, an indirect wholly-owned subsidiary of Hertz, amended the Australian Securitization to provide for aggregate maximum borrowings of AUD$400 million and to extend the maturity date to September 2028.
Covenants
The First Lien Credit Agreement requires us to comply with the following financial covenant: a First Lien Ratio, which requires a ratio of less than or equal to 3.0x in the first and last quarters of the calendar year and 3.5x in the second and third quarters of the calendar year. We are also subject to a minimum liquidity covenant, which requires $400 million for each month ending in the second and third quarters of the calendar year and $500 million for each month ending in the first and fourth quarter of the calendar year. As of June 30, 2026, we were in compliance with the First Lien Ratio and the minimum liquidity covenant.
Additionally, our Corporate Indebtedness contain customary affirmative covenants, including, among other things, the delivery of quarterly and annual financial statements and/or compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and, where applicable, the granting of security interests for the benefit of the secured parties under the applicable agreements on after-acquired real property, fixtures and future subsidiaries.
The terms of our Corporate Indebtedness contain covenants limiting the ability of Hertz and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, Hertz Global capital stock; make certain investments or other restricted payments; sell certain assets; transfer intellectual property to unrestricted subsidiaries; merge, consolidate or sell all or substantially all of its assets; and create restrictions on the ability of Hertz’s restricted subsidiaries to pay dividends or other amounts to Hertz. As per the terms of the Corporate Indebtedness, these covenants are subject to a number of important and significant limitations, qualifications and exceptions.
As of June 30, 2026, we were in compliance with all covenants under the terms of agreements governing the respective Corporate Indebtedness.
Vehicle Financing Risks
Substantially all of our revenue earning vehicles and certain related assets are owned by special-purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings or asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC, TCL Funding LP and each of the domestic and international subsidiaries that pledge vehicle and vehicle related assets as part of our securitization programs) will be available to satisfy the claims of non-vehicle secured or unsecured creditors, unless the vehicle related secured creditors under the securitization programs are paid in full.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Capital Expenditures
Revenue Earning Vehicles Expenditures and Disposals
The table below sets forth our revenue earning vehicles expenditures and related disposal proceeds for the periods shown.
Cash inflow (cash outflow) Revenue Earning Vehicles
(In millions) Capital Expenditures Disposal Proceeds Net Capital Expenditures
2026
First Quarter $ (3,602) $ 2,527 $ (1,075)
Second Quarter (3,615) 2,556 (1,059)
Total $ (7,217) $ 5,083 $ (2,134)
2025
First Quarter $ (2,847) $ 2,124 $ (723)
Second Quarter (3,049) 2,126 (923)
Total $ (5,896) $ 4,250 $ (1,646)
The table below sets forth expenditures for revenue earning vehicles, net of disposal proceeds, by segment.
Cash inflow (cash outflow) Six Months Ended June 30,
($ in millions) 2026 2025 $ Change % Change
Americas RAC $ (1,882) $ (1,405) $ (477) 34
International RAC (252) (241) (11) 5
Total $ (2,134) $ (1,646) $ (488) 30
Revenue earning vehicle expenditures increased $1.3 billion, or 22%, in the first half of 2026 compared to the same period in 2025, resulting primarily from higher vehicle acquisition costs on increased vehicle acquisitions in our Americas RAC segment. Proceeds from disposal of revenue earning vehicles increased $833 million, or 20%, in the first half of 2026 compared to the same period in 2025, primarily in our Americas RAC segment, resulting from increased vehicle dispositions.
Non-Vehicle Capital Asset Expenditures and Disposals
The table below sets forth our non-vehicle capital asset expenditures and related disposal proceeds from non-vehicle capital assets disposed of or to be disposed of for the periods shown.
Cash inflow (cash outflow) Non-Vehicle Capital Assets
(In millions) Capital Expenditures Disposal Proceeds Net Capital Expenditures
2026
First Quarter $ (29) $ 6 $ (23)
Second Quarter (28) 116 88
Total $ (57) $ 122 $ 65
2025
First Quarter $ (22) $ 27 $ 5
Second Quarter (22) 99 77
Total $ (44) $ 126 $ 82
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The table below sets forth non-vehicle capital asset expenditures, net of disposal proceeds, by segment.
Cash inflow (cash outflow) Six Months Ended June 30,
($ in millions) 2026 2025 $ Change % Change
Americas RAC 78 $ 65 $ 13 20
International RAC (9) 17 (26) NM
Corporate (4) — (4) NM
Total $ 65 $ 82 $ (17) (21)
NM - Not meaningful
In the first half of 2026, expenditures for non-vehicle capital assets increased $13 million, or 30%, compared to the same period in 2025, driven in part by increased IT-related spend, primarily in our Americas RAC segment. In the first half of 2026, proceeds for non-vehicle capital assets were comparable to the same period in 2025 resulting from an increase in the disposition of certain non-vehicle capital assets in our Americas RAC segment, partially offset by the disposition of certain non-vehicle capital assets in our International RAC segment in the first quarter of 2025.
We continually evaluate and will complete, when deemed appropriate, sales and lease backs of certain non-vehicle capital assets during 2026.
CONTRACTUAL AND OTHER OBLIGATIONS
In the second quarter of 2026, we sold and leased back certain real estate associated with an airport rental location and certain operating sites in our Americas RAC segment. The sales qualified for sale-leaseback accounting, with the exception of certain buildings, and are accounted for as operating leases and have aggregate future minimum lease payments of approximately $149 million. Refer to Note 6, "Revenues and Costs from Leases," in Part I, Item 1 of this Quarterly Report for our minimum fixed lease obligations under existing agreements as a lessee as of June 30, 2026. Refer also to Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.
The table below reflects the nominal amounts of our debt maturities and related estimated commitment fees and interest payments for each of the years ending December 31 as of June 30, 2026. Refer to Note 5, "Debt," in Part I, Item 1 of this Quarterly Report for further details regarding our aggregate indebtedness, including new issuances.
Payments Due by Period
(In millions) Total 2026 2027 - 2028 2029 - 2030 After 2030
Non-Vehicle:
Debt obligation $ 6,303 $ 209 $ 2,775 $ 3,308 $ 11
Interest on debt(1) 1,415 239 805 346 25
Vehicle:
Debt obligation 12,777 2,383 6,920 2,493 981
Interest on debt(1) 1,504 321 894 260 29
Total $ 21,999 $ 3,152 $ 11,394 $ 6,407 $ 1,046
(1) Amounts represent the estimated commitment fees and interest payments based on the principal amounts, minimum non-cancelable maturity dates and interest rates on the debt as of June 30, 2026.
Except as discussed above, as of June 30, 2026, there have been no material changes outside of the ordinary course of business with respect to our material cash requirements for our contractual and other obligations as set forth in the table included in Part II, Item 7 of our 2025 Form 10-K.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
Indemnification Obligations
There have been no significant changes to our indemnification obligations as compared to those disclosed in Note 15, "Contingencies and Off-Balance Sheet Commitments," in Part II, Item 8 of our 2025 Form 10-K.
We regularly evaluate the probability of having to incur costs associated with these indemnification obligations and have accrued for expected losses that are probable and estimable.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
There have been no material changes to our significant accounting policies due to the adoption of any recently issued accounting pronouncements as compared to those disclosed in Note 2, "Significant Accounting Policies," in Part II, Item 8 of our 2025 Form 10-K.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this Quarterly Report include "forward-looking statements." Forward-looking statements are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions, and include information concerning our liquidity, our results of operations, our business strategies, economic and industry conditions and other information. These forward-looking statements are based on certain assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors. We believe these judgments are reasonable, but you should understand that these forward-looking statements are not guarantees of future performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative.
Important factors that could affect our actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things, those that may be disclosed from time to time in subsequent reports filed with, or furnished to, the SEC, those described under Item 1A, "Risk Factors," in our 2025 Form 10-K and set forth in this Quarterly Report, and the following, which also summarizes the principal risks of our business:
•mix of program and non-program vehicles in our fleet, which can lead to increased exposure to residual value risk upon disposition;
•the potential for residual values associated with non-program vehicles in our fleet to decline, including suddenly or unexpectedly, or fail to follow historical seasonal patterns;
•our ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including upon any disruptions in the global supply chain;
•our ability to effectively dispose of vehicles, at the times and through the channels, that maximize our returns;
•the age of our fleet and its impact on vehicle carrying costs and customer service scores, as well as on our ability to sell vehicles at acceptable prices and times;
•disruptions in the supply chain, including in connection with any increases in tariffs or changes in tariff policies or trade agreements;
•whether a manufacturer of our program vehicle fulfills its repurchase obligations;
•the frequency or extent of manufacturer safety recalls;
•levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;
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•seasonality and other occurrences that disrupt rental activity during our peak periods, including in critical geographies;
•our ability to accurately estimate future levels of rental activity and adjust the number, location and mix of vehicles used in our rental operations accordingly;
•our ability to implement our business strategy or strategic transactions, including our ability to implement plans to support a modern mobility ecosystem and Oro Mobility's partnership with Uber;
•our ability to achieve cost savings and normalized depreciation levels, as well as revenue enhancements from our profitability initiatives and other operational programs;
•our ability to adequately respond to changes in technology impacting the mobility industry;
•significant changes in the competitive environment and the effect of competition in our markets on rental volume and pricing;
•our reliance on third-party distribution channels and related prices, commission structures and transaction volumes;
•our ability to offer services for a favorable customer experience, and to retain and develop customer loyalty and market share;
•our ability to maintain our network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally;
•our ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
•our ability to attract and retain effective front-line employees, senior management and other key employees;
•our ability to effectively manage our union relations and labor agreement negotiations;
•our ability to manage and respond to cybersecurity threats and cyber attacks on our information technology systems or those of our third-party providers;
•our ability, and that of our key third-party partners, to prevent the misuse or theft of information we possess, including as a result of cyber attacks and other security threats;
•our ability to evaluate, maintain, upgrade and consolidate our information technology systems;
•our ability to comply with current and future laws and regulations in the U.S. and internationally regarding data protection, data security and privacy risks;
•risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws, and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
•risks relating to tax laws and those tax laws that affect our ability to recapture accelerated tax depreciation and expensing, as well as any adverse determinations or rulings by tax authorities;
•our ability to utilize our net operating loss carryforwards;
•our exposure to uninsured liabilities relating to personal injury, death and property damage, or otherwise, including material litigation;
•the potential for adverse changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to environmental matters, optional insurance products or policies, franchising and licensing matters, the ability to pass-through rental car related expenses or taxes, among others, that affect our operations, our costs or applicable tax rates;
•the risk of an impairment of our long-lived assets, which risk could be impacted by, among other things, the timing of our fleet rotation;
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•our ability to recover our goodwill and indefinite-lived intangible assets when performing impairment analysis;
•the potential for changes in management's best estimates and assessments;
•our ability to maintain an effective compliance program;
•the availability of earnings and funds from our subsidiaries;
•our ability to comply, and the cost and burden of complying, with corporate and social responsibility regulations or expectations of stakeholders, and otherwise advance our corporate responsibility priorities;
•the availability of additional, or continued sources, of financing at acceptable rates for our revenue earning vehicles and to refinance our existing indebtedness, and our ability to comply with the covenants in the agreements governing our indebtedness;
•the extent to which our consolidated assets secure our outstanding indebtedness;
•volatility in our share price, our ownership structure and certain provisions of our charter documents, which could, among other things, negatively affect the market price of our common stock;
•our ability to implement an effective business continuity plan to protect the business in exigent circumstances;
•our ability to maintain effective internal control over financial reporting; and
•our ability to execute strategic transactions.
You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Quarterly Report and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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