v3.26.1
Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Financial Instruments
The Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates. Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements. The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, upon the occurrence of an event of default under the Company’s International Swaps and Derivatives Association ("ISDA") master derivative agreements, the non-defaulting party generally has the right, but not the obligation, to set-off any early termination amounts under any such agreements against any other amounts owed with regard to any other agreements between the parties to each such agreement.

None of the Company's financial instruments have been designated as hedging instruments as of June 30, 2026 and December 31, 2025. The Company classifies cash flows from financial instruments according to the classification of the cash flows of the economically hedged item(s).

Interest Rate Risk

The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.
Currency Exchange Rate Risk

The Company uses foreign currency exchange rate derivative financial instruments to manage its currency exposure resulting from intercompany transactions and other cross currency obligations.

Equity Price Risk

The Company has entered into privately negotiated cash-settled capped call transactions (the "Capped Call Transactions 2030") to manage its exposure to market price movements of Hertz Global common stock in connection with the Exchangeable Notes Due 2030.

Fair Value

The following table summarizes the estimated fair value of financial instruments:
Fair Value of Financial Instruments
Asset DerivativesLiability Derivatives
(In millions)June 30, 2026December 31, 2025June 30, 2026December 31, 2025
Interest rate instruments(1)
$4 $1 $— $— 
Foreign currency forward contracts(1)
1 2 3 — 
Exchange Features 2029 related to Exchangeable Notes Due 2029(2)
— — 26 78 
Exchange Feature 2030 related to Exchangeable Notes Due 2030(3)
— — 21 54 
First Lien Exchangeable Feature 2030 related to Exchangeable First Lien Notes Due 2030(4)
— — 110 — 
Capped Call Transactions 2030(5)
8 21 — — 
Total
$13 $24 $160 $132 
(1)    Asset derivatives are recorded in Prepaid expenses and other assets and liability derivatives are recorded in Accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.
(2)    The Exchange Features 2029, as defined and further disclosed in Note 11, "Fair Value Measurements," were bifurcated as derivatives from the Exchangeable Notes Due 2029 and are recorded in Non-vehicle debt in the accompanying unaudited condensed consolidated balance sheets.
(3)    The Exchange Feature 2030, as defined and further disclosed in Note 11, "Fair Value Measurements," was bifurcated as a derivative from the Exchangeable Notes Due 2030 and is recorded in Non-vehicle debt in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2026.
(4)    The First Lien Exchangeable Feature 2030, as further disclosed in Note 5, "Debt," was bifurcated as a derivative from the Exchangeable First Lien Notes Due 2030 and is recorded in Non-vehicle debt in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2026.
(5)    The Capped Call Transactions 2030 were entered into in connection with the Exchangeable Notes Due 2030 and are recorded in Prepaid expenses and other assets in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2026.
The following table summarizes the gains or (losses) on financial instruments for the period indicated:
Location of Gain (Loss) Recognized on DerivativesAmount of Gain (Loss) Recognized in Income on Derivatives
Three Months Ended
June 30,		Six Months Ended
June 30,
(In millions)2026202520262025
Interest rate instrumentsVehicle interest expense, net$(2)$(1)$— $(2)
Foreign currency forward contractsSelling, general and administrative expense— (2)(1)2 
Exchange Features 2029 related to Exchangeable Notes Due 2029(1)
Non-vehicle interest expense, net37 (105)56 (111)
Exchange Feature 2030 related to Exchangeable Notes Due 2030(2)
Non-vehicle interest expense, net19 — 33 — 
First Lien Exchangeable Feature 2030 related to Exchangeable First Lien Notes Due 2030(3)
Non-vehicle interest expense, net5 — 5 — 
Capped Call Transactions 2030
Non-vehicle interest expense, net(8)— (13)— 
Total
$51 $(108)$80 $(111)
(1)    The Exchange Features 2029, as defined and further disclosed in Note 11, "Fair Value Measurements," were bifurcated as derivatives from the Exchangeable Notes Due 2029.
(2)    The Exchange Feature 2030, as defined and further disclosed in Note 11, "Fair Value Measurements," was bifurcated as a derivative from the Exchangeable Notes Due 2030.
(3)    The First Lien Exchangeable Feature 2030 was bifurcated as a derivative from the Exchangeable First Lien Notes Due 2030, as further disclosed in Note 5, "Debt."

The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with their counterparties. The Company does not offset such derivative assets and liabilities in its unaudited condensed consolidated balance sheets, and the potential effect of the Company’s use of the master netting arrangements is not material.