Hertz Global Holdings, Inc. 10K 2019 V5

2018 Annual Report Hertz Global Holdings, Inc. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________________________________________________________ FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 HERTZ GLOBAL HOLDINGS, INC. THE HERTZ CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 001-37665 61-1770902 DELAWARE 001-07541 13-1938568 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.) incorporation or organization) 8501 Williams Road Estero, Florida 33928 (239) 301-7000 (Address, including Zip Code, and telephone number, including area code, of registrant's principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Hertz Global Holdings, Inc. Common Stock, Par Value $0.01 per share New York Stock Exchange The Hertz Corporation None None Securities registered pursuant to Section 12(g) of the Act: Hertz Global Holdings, Inc. None None The Hertz Corporation None None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Hertz Global Holdings, Inc. Yes No The Hertz Corporation Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Hertz Global Holdings, Inc. Yes No The Hertz Corporation Yes No 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 Corporation Yes No 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Hertz Global Holdings, Inc. The Hertz Corporation 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 checkmark if the registrant has not 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 If an emerging growth company, indicate by checkmark 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. 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 The aggregate market value of the voting and non-voting common equity held by non-affiliates of Hertz Global Holdings, Inc. as of June 29, 2018, the last business day of the most recently completed second fiscal quarter, based on the closing price of the stock on the New York Stock Exchange on such date was $838 million. There is no market for The Hertz Corporation stock. Indicate the number of shares outstanding as of the latest practicable date. Class Shares Outstanding as of February 18, 2019 Hertz Global Holdings, Inc. Common Stock, par value $0.01 per share 83,923,665 The Hertz Corporation Common Stock, par value $0.01 per share 100 (100% owned by Rental Car Intermediate Holdings, LLC) OMISSION OF CERTAIN INFORMATION The Hertz Corporation meets the conditions as set forth in General Instructions I.(1)(a) and (b) of Form 10-K and is therefore filing this Form with the reduced disclosure format as permitted. DOCUMENTS INCORPORATED BY REFERENCE Hertz Global Holdings, Inc. Information required by Items 10, 11, 12 and 13 of Part III of this Form 10-K are incorporated by reference for Hertz Global Holdings, Inc. from its definitive proxy statement for its 2019 Annual Meeting of Stockholders. The Hertz Corporation None HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES THE HERTZ CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS Page GLOSSARY OF TERMS i EXPLANATORY NOTE iii CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS vi PART I ITEM 1. BUSINESS 1 ITEM 1A. RISK FACTORS 18 ITEM 1B. UNRESOLVED STAFF COMMENTS 32 ITEM 2. PROPERTIES 32 ITEM 3. LEGAL PROCEEDINGS 32 EXECUTIVE OFFICERS OF THE REGISTRANTS 33 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 35 ITEM 6. SELECTED FINANCIAL DATA 37 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 40 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 68 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 71 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 161 ITEM 9A. CONTROLS AND PROCEDURES 161 ITEM 9B. OTHER INFORMATION 163 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 164 ITEM 11. EXECUTIVE COMPENSATION 164 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 164 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 164 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 164 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 166 SIGNATURES 167 EXHIBIT INDEX 168 [This page intentionally left blank] HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES THE HERTZ CORPORATION AND SUBSIDIARIES GLOSSARY OF TERMS Unless the context otherwise requires in this Annual Report on Form 10-K for the year ended December 31, 2018 we use the following defined terms: (i) "2018 Annual Report" or "Combined Form 10-K" means this Annual Report on Form 10-K for the year ended December 31, 2018, which combines the annual reports for Hertz Global Holdings, Inc. and The Hertz Corporation into a single filing; (ii) "All Other Operations" means the reportable segment comprised primarily of the Company's Donlen business and the Company's other business activities which comprise less than 1% of revenues and expenses of the segment; (iii) "the Code" means the Internal Revenue Code of 1986, as amended; (iv) "the Company", "we", "our" and "us" mean Hertz Global and Hertz interchangeably; (v) "company-operated" or "company-owned" rental locations are those through which we, or an agent of ours, rent vehicles that we own or lease; (vi) "concessions" mean licensing or permitting agreements or arrangements granting us the right to conduct our vehicle rental business at airports; (vii) "Corporate" means corporate operations, which include general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt); (viii) "Dollar Thrifty" means Dollar Thrifty Automotive Group, Inc., a consolidated subsidiary of the Company; (ix) "Donlen" means Donlen Corporation, a consolidated subsidiary of the Company. Donlen conducts our vehicle leasing and fleet management services; (x) "Hertz Gold Plus Rewards" means our customer loyalty program and our global expedited rental program; (xi) "Hertz" means The Hertz Corporation, its consolidated subsidiaries and variable interest entities, our primary operating company and a direct wholly-owned subsidiary of Rental Car Intermediate Holdings, LLC, which is wholly-owned by Hertz Holdings; (xii) "Hertz Global" means Hertz Global Holdings, Inc., our top-level holding company (and the accounting successor to Old Hertz Holdings), its consolidated subsidiaries and variable interest entities, including The Hertz Corporation; (xiii) "Hertz Ultimate Choice" is an offering at select airport locations in the U.S. that allows customers to choose their vehicle from a range of makes, models and colors available within the zone indicated on their reservation; (xiv) "Hertz Holdings" refers to Hertz Global Holdings, Inc. excluding its subsidiaries; (xv) "International RAC" means the international rental car reportable segment; (xvi) "Letter of Credit Facility" means the standalone $400 million letter of credit facility that the Company entered into in 2017 as further described in Note 7, "Debt," to the Notes to our consolidated financial

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