SEC Filing | Hertz Global Holdings, Inc.

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htzz-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________________________________________

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		June 30, 2023
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number					State of Incorporation	I.R.S. Employer Identification No.
001-37665	HERTZ GLOBAL HOLDINGS, INC.					Delaware	61-1770902
	8501 Williams Road,		Estero,	Florida	33928
	(239)	301-7000

001-07541	THE HERTZ CORPORATION					Delaware	13-1938568
	8501 Williams Road,		Estero,	Florida	33928
	(239)	301-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which Registered

Hertz Global Holdings, Inc.

Common Stock

Par value $0.01 per share

HTZ

The Nasdaq Stock Market LLC

Hertz Global Holdings, Inc.

Warrants to purchase common stock

Each exercisable for one share of Hertz Global Holdings, Inc. common stock at an exercise price of $13.80 per share, subject to adjustment

HTZWW

The Nasdaq Stock Market LLC

The Hertz Corporation

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation1 Yes ☐ No ☒

1As a voluntary filer, The Hertz Corporation is not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act. The Hertz Corporation has filed all reports pursuant to Section 13 or 15(d) of the Exchange Act during the preceding 12 months as if it was subject to such filing requirements.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Hertz Global Holdings, Inc.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

The Hertz Corporation

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Hertz Global Holdings, Inc. Yes ☐ No ☒

The Hertz Corporation Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Class

Shares Outstanding as of

July 20, 2023

Hertz Global Holdings, Inc.

Common Stock,

par value $0.01 per share

311,257,441

The Hertz Corporation(1)

Common Stock,

par value $0.01 per share

100

(1)(100% owned by

Rental Car Intermediate Holdings, LLC)

Table of` Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS



		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	1
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	57
ITEM 4.	Controls and Procedures	57
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	58
ITEM 1A.	Risk Factors	58
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
ITEM 3.	Defaults Upon Senior Securities	59
ITEM 5.	Other Information	59
ITEM 6.	Exhibits	59
EXHIBIT INDEX		60
SIGNATURE		61

Table of` Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Index


		Page
Hertz Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022		2
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022		3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2023 and 2022		4
Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022		5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022		6
The Hertz Corporation and Subsidiaries
Condensed Consolidated Balance Sheets as of June 3 0, 2023 and December 31, 2022		8
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022		9
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2023 and 2022		10
Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three and Six Months Ended June 30, 2023 and 2022		11
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022		12
Notes to the Condensed Consolidated Financial Statements
Note 1	Background	14
Note 2	Basis of Presentation	14
Note 3	Divestitures	15
Note 4	Revenue Earning Vehicles	15

Note 5	Debt	15
Note 6	Leases	20

Note 7	Income Tax (Provision) Benefit	20
Note 8	Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global	21

Note 9	Stock-Based Compensation	23
Note 10	Financial Instruments	25
Note 11	Fair Value Measurements	26
Note 12	Contingencies and Off-Balance Sheet Commitments	28

Note 13	Segment Information	30

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)



	June 30, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	682	$	943
Restricted cash and cash equivalents:
Vehicle	190		180
Non-vehicle	294		295
Total restricted cash and cash equivalents	484		475
Total cash and cash equivalents and restricted cash and cash equivalents	1,166		1,418
Receivables:
Vehicle	132		111
Non-vehicle, net of allowance of $39 and $45, respectively	1,160		863
Total receivables, net	1,292		974
Prepaid expenses and other assets	1,031		1,155
Revenue earning vehicles:
Vehicles	17,833		14,281
Less: accumulated depreciation	(1,988)		(1,786)
Total revenue earning vehicles, net	15,845		12,495
Property and equipment, net	665		637
Operating lease right-of-use assets	2,169		1,887
Intangible assets, net	2,883		2,887
Goodwill	1,044		1,044

Total assets(1)	$	26,095	$	22,497
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable:
Vehicle	$	358	$	79
Non-vehicle	577		578
Total accounts payable	935		657
Accrued liabilities	971		911
Accrued taxes, net	229		170
Debt:
Vehicle	13,100		10,886
Non-vehicle	3,470		2,977
Total debt	16,570		13,863
Public Warrants	835		617
Operating lease liabilities	2,072		1,802
Self-insured liabilities	451		472
Deferred income taxes, net	1,193		1,360

Total liabilities(1)	23,256		19,852
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, no shares issued and outstanding	—		—
Common stock, $0.01 par value, 479,126,125 and 478,914,062 shares issued, respectively, and 311,692,986 and 323,483,178 shares outstanding, respectively	5		5
Treasury stock, at cost, 167,433,139 and 155,430,884 common shares, respectively	(3,338)		(3,136)
Additional paid-in capital	6,369		6,326
Retained earnings (Accumulated deficit)	79		(256)
Accumulated other comprehensive income (loss)	(276)		(294)


Total stockholders' equity	2,839		2,645
Total liabilities and stockholders' equity	$	26,095	$	22,497

(1) Hertz Global Holdings, Inc.'s consolidated total assets as of June 30, 2023 and December 31, 2022 include total assets of variable interest entities (“VIEs”) of $1.9 billion and $1.3 billion, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of June 30, 2023 and December 31, 2022 include total liabilities of VIEs of $1.9 billion and $1.3 billion, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc. See "Pledges Related to Vehicle Financing" in Note 5, "Debt," for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions, except per share data)



	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022



Revenues	$	2,437	$	2,344	$	4,484	$	4,154
Expenses:
Direct vehicle and operating	1,347		1,199		2,568		2,252
Depreciation of revenue earning vehicles and lease charges, net	329		106		710		47
Non-vehicle depreciation and amortization	32		36		67		69
Selling, general and administrative	285		257		506		492
Interest expense, net:
Vehicle	132		45		243		50
Non-vehicle	56		41		107		80
Interest expense, net	188		86		350		130

Other (income) expense, net	(2)		2		7		—
(Gain) on sale of non-vehicle capital assets	—		—		(162)		—
Change in fair value of Public Warrants	100		(461)		218		(511)
Total expenses	2,279		1,225		4,264		2,479
Income (loss) before income taxes	158		1,119		220		1,675
Income tax (provision) benefit	(19)		(179)		115		(309)
Net income (loss)	$	139	$	940	$	335	$	1,366



Weighted-average common shares outstanding:
Basic	314		398		318		415
Diluted	315		424		319		443
Earnings (loss) per common share:
Basic	$	0.44	$	2.36	$	1.06	$	3.29
Diluted	$	0.44	$	1.13	$	1.05	$	1.93

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	139	$	940	$	335	$	1,366
Other comprehensive income (loss):
Foreign currency translation adjustments	4		(59)		18		(66)







Total other comprehensive income (loss)	4		(59)		18		(66)
Total comprehensive income (loss)	$	143	$	881	$	353	$	1,300

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Unaudited

(In millions)


	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Retained Earnings (Accumulated deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Total Stockholders' Equity
Balance as of:
December 31, 2021	—	$	—	450	$	5	$	6,209	$	(2,315)	$	(214)	27	$	(708)	$	2,977
Net income (loss)	—	—		—	—		—		426		—		—	—		426
Other comprehensive income (loss)	—	—		—	—		—		—		(7)		—	—		(7)
Net settlement on vesting of restricted stock	—	—		—	—		(4)		—		—		—	—		(4)
Stock-based compensation charges	—	—		—	—		28		—		—		—	—		28

Public Warrant exercises	—	—		—	—		4		—		—		—	—		4
Shares repurchases	—	—		(35)	—		—		—		—		35	(722)		(722)
March 31, 2022	—	—		415	5		6,237		(1,889)		(221)		62	(1,430)		2,702
Net income (loss)	—	—		—	—		—		940		—		—	—		940
Other comprehensive income (loss)	—	—		—	—		—		—		(59)		—	—		(59)
Stock-based compensation charges	—	—		—	—		36		—		—		—	—		36





Public Warrants exercises	—	—		—	—		1		—		—		—	—		1
Shares repurchases	—	—		(47)	—		—		—		—		47	(891)		(891)

June 30, 2022	—	$	—	368	$	5	$	6,274	$	(949)	$	(280)	109	$	(2,321)	$	2,729

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Unaudited

(In millions)



	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Retained Earnings (Accumulated deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Total Stockholders' Equity
Balance as of:
December 31, 2022	—	$	—	323	$	5	$	6,326	$	(256)	$	(294)	155	$	(3,136)	$	2,645
Net income (loss)	—	—		—	—		—		196		—		—	—		196
Other comprehensive income (loss)	—	—		—	—		—		—		14		—	—		14
Net settlement on vesting of restricted stock	—	—		—	—		(1)		—		—		—	—		(1)
Stock-based compensation charges	—	—		—	—		21		—		—		—	—		21

Share repurchases(1)(2)	—	—		(5)	—		—		—		—		6	(101)		(101)

March 31, 2023	—	—		318	5		6,346		(60)		(280)		161	(3,237)		2,774
Net income (loss)	—	—		—	—		—		139		—		—	—		139
Other comprehensive income (loss)	—	—		—	—		—		—		4		—	—		4
Stock-based compensation charges	—	—		—	—		22		—		—		—	—		22
Public Warrant exercises(2)	—	—		—	—		1		—		—		—	—		1
Share repurchases(2)	—	—		(6)	—		—		—		—		6	(101)		(101)
June 30, 2023	—	$	—	312	$	5	$	6,369	$	79	$	(276)	167	$	(3,338)	$	2,839

(1) The amounts presented herein may be rounded to agree to amounts in the unaudited condensed consolidated balance sheet.

(2) Also see Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global."

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	335	$	1,366
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles, net	884		145
Depreciation and amortization, non-vehicle	67		69
Amortization of deferred financing costs and debt discount (premium)	29		25

Stock-based compensation charges	43		64
Provision for receivables allowance	40		23
Deferred income taxes, net	(163)		249



(Gain) loss on sale of non-vehicle capital assets	(165)		(3)
Change in fair value of Public Warrants	218		(511)
Changes in financial instruments	106		(65)

Other	5		—
Changes in assets and liabilities:
Non-vehicle receivables	(334)		(200)
Prepaid expenses and other assets	(98)		(87)
Operating lease right-of-use assets	165		79
Non-vehicle accounts payable	6		(32)
Accrued liabilities	68		233
Accrued taxes, net	56		52
Operating lease liabilities	(178)		(93)
Self-insured liabilities	(25)		15
Net cash provided by (used in) operating activities	1,059		1,329
Cash flows from investing activities:
Revenue earning vehicles expenditures	(6,543)		(6,089)
Proceeds from disposal of revenue earning vehicles	2,766		2,887
Non-vehicle capital asset expenditures	(123)		(59)
Proceeds from non-vehicle capital assets disposed of	176		6


Collateral returned in exchange for letters of credit	—		19
Return of (investment in) equity investments	(1)		(15)


Net cash provided by (used in) investing activities	(3,725)		(3,251)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt	4,021		7,379
Repayments of vehicle debt	(1,872)		(4,824)
Proceeds from issuance of non-vehicle debt	1,250		—
Repayments of non-vehicle debt	(759)		(10)
Payment of financing costs	(17)		(38)




Proceeds from exercises of Public Warrants	—		3

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


	Six Months Ended June 30,
	2023		2022
Share repurchases	(222)		(1,647)


Other	—		(4)
Net cash provided by (used in) financing activities	2,401		859
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	13		(25)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period	(252)		(1,088)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	1,418		2,651
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	1,166	$	1,563

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle	$	207	$	92
Non-vehicle	117		74
Income taxes, net of refunds	10		37

Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	336	$	128
Sales of revenue earning vehicles included in vehicle receivables	110		81

Purchases of non-vehicle capital assets included in accounts payable	19		21

Revenue earning vehicles and non-vehicle capital assets acquired through finance lease	25		6

Public Warrant exercises	—		3


Accrual for purchases of treasury shares	2		20

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)



	June 30, 2023		December 31, 2022
ASSETS
Cash and cash equivalents	$	681	$	943
Restricted cash and cash equivalents:
Vehicle	190		180
Non-vehicle	294		295
Total restricted cash and cash equivalents	484		475
Total cash and cash equivalents and restricted cash and cash equivalents	1,165		1,418
Receivables:
Vehicle	132		111
Non-vehicle, net of allowance of $39 and $45, respectively	1,160		863
Total receivables, net	1,292		974

Prepaid expenses and other assets	1,031		1,154
Revenue earning vehicles:
Vehicles	17,833		14,281
Less: accumulated depreciation	(1,988)		(1,786)
Total revenue earning vehicles, net	15,845		12,495
Property and equipment, net	665		637
Operating lease right-of-use assets	2,169		1,887
Intangible assets, net	2,883		2,887
Goodwill	1,044		1,044

Total assets(1)	$	26,094	$	22,496
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable:
Vehicle	$	358	$	79
Non-vehicle	577		578
Total accounts payable	935		657
Accrued liabilities	969		890
Accrued taxes, net	227		170
Debt:
Vehicle	13,100		10,886
Non-vehicle	3,470		2,977
Total debt	16,570		13,863
Operating lease liabilities	2,072		1,802
Self-insured liabilities	451		472
Deferred income taxes, net	1,196		1,363



Total liabilities(1)	22,420		19,217
Commitments and contingencies
Stockholder's equity:
Common stock, $0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding	—		—
Additional paid-in capital	4,667		4,844

Retained earnings (Accumulated deficit)	(717)		(1,271)
Accumulated other comprehensive income (loss)	(276)		(294)


Total stockholder's equity	3,674		3,279
Total liabilities and stockholder's equity	$	26,094	$	22,496

(1) The Hertz Corporation's consolidated total assets as of June 30, 2023 and December 31, 2022 include total assets of VIEs of $1.9 billion and $1.3 billion, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of June 30, 2023 and December 31, 2022 include total liabilities of VIEs of $1.9 billion and $1.3 billion, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation. See "Pledges Related to Vehicle Financing" in Note 5, "Debt," for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions)



	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022



Revenues	$	2,437	$	2,344	$	4,484	$	4,154
Expenses:
Direct vehicle and operating	1,347		1,199		2,568		2,252
Depreciation of revenue earning vehicles and lease charges, net	329		106		710		47
Non-vehicle depreciation and amortization	32		36		67		69
Selling, general and administrative	285		257		506		492
Interest expense, net:
Vehicle	132		45		243		50
Non-vehicle	56		41		107		80
Interest expense, net	188		86		350		130

Other (income) expense, net	(2)		2		7		—
(Gain) on sale of non-vehicle capital assets	—		—		(162)		—
Total expenses	2,179		1,686		4,046		2,990
Income (loss) before income taxes	258		658		438		1,164
Income tax (provision) benefit	(18)		(178)		116		(308)
Net income (loss)	$	240	$	480	$	554	$	856

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income (loss)	$	240	$	480	$	554	$	856
Other comprehensive income (loss):
Foreign currency translation adjustments	4		(59)		18		(66)







Total other comprehensive income (loss)	4		(59)		18		(66)
Total comprehensive income (loss)	$	244	$	421	$	572	$	790

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)

Unaudited

(In millions, except share data)


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholder's Equity (Deficit)
Balance as of:
December 31, 2021	100	$	—	$	7,190	$	(2,626)	$	(214)	$	4,350
Net income (loss)	—	—		—		376		—		376
Other comprehensive income (loss)	—	—		—		—		(7)		(7)
Stock-based compensation charges	—	—		28		—		—		28
Dividends paid to Hertz Holdings	—	—		(767)		—		—		(767)

March 31, 2022	100	—		6,451		(2,250)		(221)		3,980
Net income (loss)	—	—		—		480		—		480

Other comprehensive income (loss)	—	—		—		—		(59)		(59)

Stock-based compensation charges	—	—		36		—		—		36

Dividends paid to Hertz Holdings	—	—		(881)		—		—		(881)

June 30, 2022	100	$	—	$	5,606	$	(1,770)	$	(280)	$	3,556


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholder's Equity (Deficit)
Balance as of:
December 31, 2022	100	$	—	$	4,844	$	(1,271)	$	(294)	$	3,279
Net income (loss)	—	—		—		314		—		314
Other comprehensive income (loss)	—	—		—		—		14		14
Stock-based compensation charges	—	—		21		—		—		21
Dividends paid to Hertz Holdings(1)	—	—		(118)		—		—		(118)
March 31, 2023	100	—		4,747		(957)		(280)		3,510
Net income (loss)	—	—		—		240		—		240
Other comprehensive income (loss)	—	—		—		—		4		4
Stock-based compensation charges	—	—		22		—		—		22
Dividends paid to Hertz Holdings(1)	—	—		(102)		—		—		(102)
June 30, 2023	100	$	—	$	4,667	$	(717)	$	(276)	$	3,674

(1) See "Share Repurchase Programs for Common Stock" in Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," for additional information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	554	$	856
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles, net	884		145
Depreciation and amortization, non-vehicle	67		69
Amortization of deferred financing costs and debt discount (premium)	29		25

Stock-based compensation charges	43		64
Provision for receivables allowance	40		23
Deferred income taxes, net	(163)		249




(Gain) loss on sale of non-vehicle capital assets	(165)		(3)
Changes in financial instruments	106		(65)
Other	4		—
Changes in assets and liabilities:
Non-vehicle receivables	(334)		(200)
Prepaid expenses and other assets	(98)		(87)
Operating lease right-of-use assets	165		79
Non-vehicle accounts payable	6		(32)
Accrued liabilities	68		233
Accrued taxes, net	54		52
Operating lease liabilities	(178)		(93)
Self-insured liabilities	(25)		15
Net cash provided by (used in) operating activities	1,057		1,330
Cash flows from investing activities:
Revenue earning vehicles expenditures	(6,543)		(6,089)
Proceeds from disposal of revenue earning vehicles	2,766		2,887
Non-vehicle capital asset expenditures	(123)		(59)
Proceeds from non-vehicle capital assets disposed of	176		6


Collateral returned in exchange for letters of credit	—		19
Return of (investment in) equity investments	(1)		(15)


Net cash provided by (used in) investing activities	(3,725)		(3,251)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt	4,021		7,379
Repayments of vehicle debt	(1,872)		(4,824)
Proceeds from issuance of non-vehicle debt