HERTZ REPORTS SECOND QUARTER 2024 RESULTS

"We're moving quickly with a best-in-class leadership team, a strategy laser-focused on delivering sustainable returns and elevating our operational performance across the business," said Gil West, Hertz CEO. "During the second quarter, we bolstered our liquidity to expedite our cost and revenue improvement initiatives and accelerate our fleet refresh to provide vehicles aligned with customer needs. We are at an exciting inflection point in our path to generate greater value for our customers, employees and shareholders – and I am more confident than ever in our plan, our team and the road ahead."

ESTERO, Fla. , Aug. 1, 2024 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its second quarter 2024.

• Revenue of $2.4 billion
• GAAP net loss of $865 million , a negative 37% margin, or $2.82 loss per diluted share
• Adjusted net loss of $440 million , or $1.44 loss per diluted share
• Adjusted Corporate EBITDA of negative $460 million , a negative 20% margin, due mainly to an increase in vehicle depreciation of $706 million largely driven by acceleration of the Company's fleet refresh
• GAAP operating cash flow of $546 million ; Adjusted operating cash outflow of $576 million and adjusted free cash outflow of $553 million
• The Company raised $1 billion during the quarter to bolster liquidity and de-risk its fleet refresh
• Corporate liquidity of $1.8 billion at June 30, 2024

SECOND QUARTER RESULTS

Second quarter revenue was $2.4 billion . Demand was healthy yet the Company remained disciplined on capacity and prioritized rate. Execution of the Company's revenue strategy continued to narrow its year-over-year RPD decline, which was 3% for the quarter and moderated to 2% in June.

Vehicle depreciation increased $706 million compared to the prior year quarter due mainly to a decline in future and current residual values. As previously announced, acceleration of the Company's fleet refresh shortened the hold period on a substantial portion of its fleet, which resulted in DPU of $600 for the quarter, up sequentially from Q1 2024. The Company expects to substantially complete the refresh by the end of 2025, at which time it expects DPU to normalize in the low $300s.

Direct operating expense on a per transaction day basis in the second quarter of 2024 increased by 7% year over year. Approximately 30% of the increase was driven by non-recurring charges in both periods. The remaining increase was driven by insurance, personnel, and collision and damage costs, as well as general inflationary pressure. The Company has cost management actions in place to reduce expenses and increase productivity.

Consistent with previous guidance, Adjusted Corporate EBITDA was negative $460 million in the quarter compared with positive Adjusted Corporate EBITDA of $347 million in the prior year quarter. The decrease was due mainly to increased vehicle depreciation.

Recently, the Company announced critical executive management appointments to strengthen its leadership team and sharpen the Company's focus on driving enhanced profitability through operational excellence, superior customer service, strategic fleet management, cost control, and premium revenue.

SUMMARY RESULTS

Three Months Ended

Percent
Inc/(Dec)

2024 vs 2023

($ in millions, except earnings per share or where noted)

Hertz Global - Consolidated

Net income (loss)

Net income (loss) margin

Adjusted net income (loss) (a)

Adjusted diluted earnings (loss) per share (a)

Adjusted Corporate EBITDA (a)

Adjusted Corporate EBITDA Margin (a)

Average Vehicles (in whole units)

Average Rentable Vehicles (in whole units)

Transaction Days (in thousands)

Total RPD (in dollars) (b)

Total RPU Per Month (in whole dollars) (b)

Depreciation Per Unit Per Month (in whole dollars) (b)

Americas RAC Segment

Adjusted EBITDA Margin

Average Vehicles (in whole units)

Average Rentable Vehicles (in whole units)

Transaction Days (in thousands)

Total RPD (in dollars) (b)

Total RPU Per Month (in whole dollars) (b)

Depreciation Per Unit Per Month (in whole dollars) (b)

International RAC Segment

Adjusted EBITDA Margin

Average Vehicles (in whole units)

Average Rentable Vehicles (in whole units)

Transaction Days (in thousands)

Total RPD (in dollars) (b)

Total RPU Per Month (in whole dollars) (b)

Depreciation Per Unit Per Month (in whole dollars) (b)

NM - Not meaningful

(a) Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2024 and 2023.

(b) Based on December 31, 2023 foreign exchange rates.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its second quarter 2024 results will be held on August 1, 2024, at 9:00 a.m. Eastern Time . The conference call will be broadcast live in listen-only mode on the Company's investor relations website at IR.Hertz.com. If you would like to access the call by phone and ask a question, please go to Hertz Q2 earnings participant call link, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call. A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.

UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS

In this earnings release, we include select unaudited financial data of Hertz Global, Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measures. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its rationale on the importance and usefulness of non-GAAP measures for investors and management.

ABOUT HERTZ

The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America , Europe , the Caribbean , Latin America , Africa , the Middle East , Asia , Australia and New Zealand . The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation owns and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this release, and in related comments by the Company's management, 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, the business environment and other information. These forward-looking statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors. The Company believes these judgments are reasonable, but you should understand that these forward-looking statements are not guarantees of future performance or results, and that the Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished to the SEC.

Important factors that could affect the Company's actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things:

• mix of program and non-program vehicles in the Company's fleet, which can lead to increased exposure to residual value risk upon disposition;
• the potential for residual values associated with non-program vehicles in the Company's fleet to decline, including suddenly or unexpectedly, or fail to follow historical seasonal patterns;
• the Company's 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;
• the Company's ability to effectively dispose of vehicles, at the times and through the channels, that maximize the Company's returns;
• the age of the Company's fleet, and its impact on vehicle carrying costs, customer service scores, as well as on the Company's ability to sell vehicles at acceptable prices and times;
• whether a manufacturer of the Company's 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;
• seasonality and other occurrences that disrupt rental activity during the Company's peak periods, including in critical geographies;
• the Company's ability to accurately estimate future levels of rental activity and adjust the number, location and mix of vehicles used in the Company's rental operations accordingly;
• the Company's ability to implement its business strategy or strategic transactions, including the Company's ability to implement plans to support an electric vehicle fleet and to play a central role in the modern mobility ecosystem;
• the Company's ability to achieve cost savings and normalized depreciation levels, as well as revenue enhancements from its profitability initiatives and other operational programs;
• the Company's ability to adequately respond to changes in technology impacting the mobility industry;
• significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing;
• the Company's reliance on third-party distribution channels and related prices, commission structures and transaction volumes;
• the Company's ability to offer services for a favorable customer experience, and to retain and develop customer loyalty and market share;
• the Company's ability to maintain its network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally;
• the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
• the Company's ability to attract and retain effective frontline employees, senior management and other key employees;
• the Company's ability to effectively manage its union relations and labor agreement negotiations;
• the Company's ability to manage and respond to cybersecurity threats and cyber attacks on the Company's information technology systems, or those of the Company's third-party providers;
• the Company's ability, and that of the Company's key third-party partners, to prevent the misuse or theft of information the Company possesses, including as a result of cyber attacks and other security threats;
• the Company's ability to maintain, upgrade and consolidate its information technology systems;
• the Company's 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 the Company's ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
• risks relating to tax laws, including those that affect the Company's ability to recapture accelerated tax depreciation and expensing, as well as any adverse determinations or rulings by tax authorities;
• the Company's ability to utilize its net operating loss carryforwards;
• the Company's 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 the Company's operations, the Company's costs or applicable tax rates;
• the Company's ability to recover its goodwill and indefinite-lived intangible assets when performing impairment analysis;
• the potential for changes in management's best estimates and assessments;
• the Company's ability to maintain an effective compliance program;
• the availability of earnings and funds from the Company's subsidiaries;
• the Company's ability to comply, and the cost and burden of complying, with environmental, social and governance, or ESG, regulations or expectations of stakeholders, and otherwise achieve the Company's corporate responsibility goals;
• the availability of additional or continued sources of financing at acceptable rates for the Company's revenue earning vehicles and to refinance the Company's existing indebtedness, and the Company's ability to comply with the covenants in the agreements governing its indebtedness;
• the extent to which the Company's consolidated assets secure its outstanding indebtedness;
• volatility in the Company's share price, the Company's ownership structure and certain provisions of the Company's charter documents, which could negatively affect the market price of the Company's common stock;
• the Company's ability to implement an effective business continuity plan to protect the business in exigent circumstances;
• the Company's ability to effectively maintain effective internal control over financial reporting; and
• the Company's ability to execute strategic transactions.

Additional information concerning these and other factors can be found in the Company's filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this release, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

UNAUDITED FINANCIAL INFORMATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended