v3.26.1
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Schedule of Fair Value of the Debt Facilities
The fair value of the debt facilities is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e., Level 2 inputs).
June 30, 2026December 31, 2025
(In millions)Nominal Unpaid Principal BalanceAggregate Fair ValueNominal Unpaid Principal BalanceAggregate Fair Value
Other Non-Vehicle Debt$5,246 $3,729 $4,828 $4,187 
Exchangeable Notes Due 2029
282 127 271 311 
Exchangeable Notes Due 2030
425 136 425 324 
Exchangeable First Lien Notes Due 2030
350 305 — — 
Total Non-Vehicle Debt6,303 4,297 5,524 4,822 
Vehicle Debt12,777 12,812 11,679 11,662 
Total$19,080 $17,109 $17,203 $16,484 
Schedule of Company's Assets And Liabilities
The following table summarizes the Company's assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as follows:
June 30, 2026December 31, 2025
(In millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:
Cash equivalents and restricted cash equivalents$138 $— $— $138 $287 $— $— $287 
Capped Call Transactions 2030
— — 8 8 — — 21 21 
Liabilities:
Public Warrants$90 $— $— $90 $222 $— $— $222 
Exchange Features 2029
— — 26 26 — — 78 78 
Exchange Feature 2030
— — 21 21 — — 54 54 
First Lien Exchangeable Feature 2030— — 110 110 — — — — 
Schedule of Estimated Fair Value of the Exchange Feature
The estimated fair values of the Exchange Features 2029 were computed using the following key inputs as of June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
Hertz Global common share price$2.27 $5.14 
Expected term (years)3.043.54
Risk-free interest rate4.15 %3.60 %
Credit spread40.90 %11.26 %
Expected volatility70.00 %35.00 %
The estimated fair value of the Exchange Feature 2030 was computed using the following key inputs as of June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
Hertz Global common share price$2.27 $5.14 
Expected term (years)4.254.75
Risk-free interest rate4.18 %3.71 %
Credit spread40.67 %12.45 %
Expected volatility70.00 %35.00 %
The estimated fair value of the First Lien Exchangeable Feature 2030 was computed using the following key inputs as of June 30, 2026 and upon issuance:
June 30, 2026Issuance
Hertz Global common share price$2.27 $2.30 
Expected term (years)4.004.01
Risk-free interest rate4.17 %4.12 %
Credit spread16.35 %13.91 %
Expected volatility70.00 %70.00 %
The estimated fair value of the Capped Call Transactions 2030 was computed using the following key inputs as of June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
Hertz Global common share price$2.27 $5.14 
Expected term (years)4.254.75
Risk-free interest rate4.18 %3.71 %
Dividend yield— %— %
Expected volatility70.00 %36.00 %
Schedule of Fair Value Measurements
The following table summarizes the activity related to the Exchange Features 2029 measured at fair value utilizing significant unobservable inputs (Level 3):
(In millions)
Exchange Features 2029
Balance as of December 31, 2024$61 
Initial recognition of derivative liability(1)
11 
(Gain) loss in fair value recognized in earnings6 
Balance as of December 31, 202578 
Initial recognition of derivative liability(2)
4 
(Gain) loss in fair value recognized in earnings(3)
(19)
Balance as of March 31, 202663 
(Gain) loss in fair value recognized in earnings(4)
(37)
Balance as of June 30, 2026
$26 
(1)    Represents the initial debt discounts recognized in association with the Semi-Annual PIK events occurring in the first and third quarters of 2025.
(2)    Represents the initial debt discount recognized in association with the Semi-Annual PIK event occurring in the first quarter of 2026. See Note 5, "Debt," for further details.
(3)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2026.
(4)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.
The following table summarizes the activity related to the Exchange Feature 2030 measured at fair value utilizing significant unobservable inputs (Level 3):
(In millions)Exchange Feature 2030
Balance as of December 31, 2024$— 
Initial recognition of derivative liability103 
(Gain) loss in fair value recognized in earnings(49)
Balance as of December 31, 202554 
(Gain) loss in fair value recognized in earnings(1)
(14)
Balance as of March 31, 202640 
(Gain) loss in fair value recognized in earnings(2)
(19)
Balance as of June 30, 2026$21 
(1)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2026.
(2)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.
The following table summarizes the activity related to the First Lien Exchangeable Feature 2030 measured at fair value utilizing significant unobservable inputs (Level 3):
(In millions)Exchangeable Feature 2030
Balance as of December 31, 2025$— 
Initial recognition of derivative liability115 
(Gain) loss in fair value recognized in earnings(1)
(5)
Balance as of June 30, 2026$110 
(1)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.
The following table summarizes the activity related to the Capped Call Transactions 2030 measured at fair value utilizing significant unobservable inputs (Level 3):
(In millions)Capped Call Transactions 2030
Balance as of December 31, 2024$— 
Initial recognition of derivative asset37 
Gain (loss) in fair value recognized in earnings(16)
Balance as of December 31, 202521 
Gain (loss) in fair value recognized in earnings(1)
(5)
Balance as of March 31, 202616 
Gain (loss) in fair value recognized in earnings(2)
(8)
Balance as of June 30, 2026
$8 
(1)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2026.
(2)    Included in Non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.