Guarantor and Non-Guarantor Condensed Consolidating Financial Statements

The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of September 30, 2016 and December 31, 2015, the Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015 and the Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 of (a) The Hertz Corporation, ("Parent”); (b) the Parent's subsidiaries that guarantee the Parent's indebtedness ("Guarantor Subsidiaries"); (c) the Parent's subsidiaries that do not guarantee the Parent's indebtedness ("Non-Guarantor Subsidiaries"); (d) elimination entries necessary to consolidate the Parent with the Guarantor Subsidiaries and Non-Guarantor Subsidiaries ("Eliminations"); and of (e) the Company on a consolidated basis.

Investments in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. The Guarantor Subsidiaries are 100% owned by the Parent and all guarantees are full and unconditional and joint and several. Additionally, substantially all of the assets of the Guarantor Subsidiaries are pledged under the Senior Facilities, and consequently will not be available to satisfy the claims of the Company's general creditors. In lieu of providing separate unaudited financial statements for the Guarantor Subsidiaries, we have included the accompanying condensed consolidating financial statements based on Rule 3-10 of the SEC's Regulation S-X. Management does not believe that separate financial statements of the Guarantor Subsidiaries are material to our investors; therefore, separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented.

As described in Note 1, "Background" and Note 3, "Discontinued Operations", Hertz completed the Spin-Off of its equipment rental business on June 30, 2016. In connection with the Spin-Off, certain amounts that were historically recorded on the balance sheet of the Parent were distributed with the discontinued entities. These amounts primarily related to defined benefit pension plans, workers’ compensation liabilities, and income taxes. These amounts have been reclassified in the 2015 condensed consolidating financial statements to reflect the balances transferred in the Guarantor Subsidiaries' and Non-Guarantor Subsidiaries' financial statements based on which discontinued entity received the distribution in the Spin-Off.

During the preparation of the condensed consolidating financial information of The Hertz Corporation and Subsidiaries as of and for the three and six months ended June 30, 2016, it was determined that investments in subsidiaries at December 31, 2015 as filed in the Company's 2015 Form 10-K were improperly classified, resulting in a $453 million understatement of these assets and equity for the Non-Guarantor Subsidiaries, and an understatement of these assets and overstatement of prepaid expenses and other assets for the Guarantor Subsidiaries. The classification errors, which the Company has determined are not material to this disclosure, are eliminated upon consolidation and, therefore, have no impact on the Company's consolidated financial condition, results of operations, or cash flows. The Company has revised the Guarantor, Non-Guarantor, and Eliminations Condensed Consolidating Balance Sheets as of December 31, 2015 to correct for these errors.

During the preparation of the condensed consolidating financial information of The Hertz Corporation and Subsidiaries as of and for the three and nine months ended September 30, 2016, it was determined that cash flows from operating activities and investing activities for the Parent and Non-Guarantor Subsidiaries were misstated as filed in the Company’s second quarter 2016 Form 10-Q, resulting in a $411 million overstatement of net cash used in operating activities and a $411 million overstatement of net cash provided by investing activities of the Parent, and a $411 million overstatement of net cash provided by operating activities and a $411 million overstatement of net cash used in investing activities of the Non-Guarantor Subsidiaries. These errors had no impact to the Guarantor Subsidiaries and no impact to financing activities. These errors, which the Company determined are not material, have no impact on the Company's consolidated financial condition, results of operations, or cash flows. The Company has corrected this error in the condensed consolidating statements of cash flows for the nine months ended September 30, 2016 presented herein.

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2016

(In millions)



	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			The Hertz Corporation & Subsidiaries
ASSETS
Cash and cash equivalents	$	830	$	13	$	587	$	—		$	1,430
Restricted cash and cash equivalents	93		2		229		—			324
Receivables, net of allowance	646		204		606		—			1,456
Due from affiliates	3,524		3,611		8,989		(16,124		)	—
Inventories, net	15		4		14		—			33
Prepaid expenses and other assets	4,935		45		275		(4,686		)	569
Revenue earning vehicles, net	402		6		11,300		—			11,708
Property and equipment, net	661		69		148		—			878
Investment in subsidiaries, net	6,357		662		—		(7,019		)	—
Other intangible assets, net	92		3,358		23		—			3,473
Goodwill	102		942		212		—			1,256
Total assets	$	17,657	$	8,916	$	22,383	$	(27,829	)	$	21,127
LIABILITIES AND EQUITY
Due to affiliates	$	10,049	$	1,779	$	4,296	$	(16,124	)	$	—
Accounts payable	292		90		410		—			792
Accrued liabilities	621		108		344		—			1,073
Accrued taxes, net	85		25		2,673		(2,587		)	196
Debt	4,883		—		9,980		—			14,863
Public liability and property damage	154		48		222		—			424
Deferred taxes on income, net	—		2,081		2,224		(2,099		)	2,206
Total liabilities	16,084		4,131		20,149		(20,810		)	19,554
Equity:
Stockholder's equity	1,573		4,785		2,234		(7,019		)	1,573
Total liabilities and equity	$	17,657	$	8,916	$	22,383	$	(27,829	)	$	21,127

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2015

(In millions)



	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			The Hertz Corporation & Subsidiaries
ASSETS
Cash and cash equivalents	$	179	$	17	$	278	$	—		$	474
Restricted cash and cash equivalents	57		3		273		—			333
Receivables, net of allowance	399		183		1,204		—			1,786
Due from affiliates	4,158		3,238		7,543		(14,939		)	—
Inventories, net	15		3		11		—			29
Prepaid expenses and other assets	4,503		695		450		(4,682		)	966
Revenue earning vehicles, net	388		6		10,352		—			10,746
Property and equipment, net	777		74		151		—			1,002
Investment in subsidiaries, net	7,457		1,614		—		(9,071		)	—
Other intangible assets, net	142		3,350		30		—			3,522
Goodwill	102		942		217		—			1,261
Assets of discontinued operations	—		2,989		401		—			3,390
Total assets	$	18,177	$	13,114	$	20,910	$	(28,692	)	$	23,509
LIABILITIES AND EQUITY
Due to affiliates	$	8,888	$	1,465	$	3,961	$	(14,314	)	$	—
Accounts payable	262		81		423		—			766
Accrued liabilities	584		114		337		—			1,035
Accrued taxes, net	223		19		2,849		(2,963		)	128
Debt	6,126		—		9,644		—			15,770
Public liability and property damage	146		48		200		—			394
Deferred taxes on income, net	—		2,005		1,882		(1,719		)	2,168
Liabilities of discontinued operations	—		1,915		9		(624		)	1,300
Total liabilities	16,229		5,647		19,305		(19,620		)	21,561
Equity:
Stockholder's equity	1,948		7,467		1,605		(9,072		)	1,948
Total liabilities and equity	$	18,177	$	13,114	$	20,910	$	(28,692	)	$	23,509

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30, 2016

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	1,273		$	425		$	1,872		$	(1,028	)	$	2,542
Expenses:
Direct vehicle and operating	782			206			365			—			1,353
Depreciation of revenue earning vehicles and lease charges, net	871			192			660			(1,028		)	695
Selling, general and administrative	153			12			62			—			227
Interest expense, net	103			(17		)	70			—			156
Other (income) expense, net	3			—			—			—			3
Total expenses	1,912			393			1,157			(1,028		)	2,434
Income (loss) from continuing operations before income taxes and equity in earnings (losses) of subsidiaries	(639		)	32			715			—			108
(Provision) benefit for taxes on income (loss) of continuing operations	416			(26		)	(454		)	—			(64		)
Equity in earnings (losses) of subsidiaries, net of tax	265			117			—			(382		)	—
Net income (loss) from continuing operations	42			123			261			(382		)	44
Net income (loss) from discontinued operations	—			(2		)	—			—			(2		)
Net income (loss)	42			121			261			(382		)	42
Other comprehensive income (loss), net of tax	18			—			16			(16		)	18
Comprehensive income (loss)	$	60		$	121		$	277		$	(398	)	$	60

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30, 2015

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	1,271		$	439		$	1,707		$	(842	)	$	2,575
Expenses:
Direct vehicle and operating	765			218			363			(1		)	1,345
Depreciation of revenue earning vehicles and lease charges, net	650			210			612			(841		)	631
Selling, general and administrative	133			13			72			—			218
Interest expense, net	98			(9		)	64			—			153
Other (income) expense, net	10			—			(38		)	—			(28		)
Total expenses	1,656			432			1,073			(842		)	2,319
Income (loss) from continuing operations before income taxes and equity in earnings (losses) of subsidiaries	(385		)	7			634			—			256
(Provision) benefit for taxes on income (loss) of continuing operations	151			2			(192		)	—			(39		)
Equity in earnings (losses) of subsidiaries, net of tax	472			135			—			(607		)	—
Net income (loss) from continuing operations	238			144			442			(607		)	217
Net income (loss) from discontinued operations	—			24			(3		)	—			21
Net income (loss)	238			168			439			(607		)	238
Other comprehensive income (loss), net of tax	(40		)	—			(39		)	39			(40		)
Comprehensive income (loss)	$	198		$	168		$	400		$	(568	)	$	198

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2016

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	3,532		$	1,150		$	4,803		$	(2,691	)	$	6,794
Expenses:
Direct vehicle and operating	2,200			587			992			(1		)	3,778
Depreciation of revenue earning vehicles and lease charges, net	2,252			540			1,836			(2,688		)	1,940
Selling, general and administrative	456			36			195			(2		)	685
Interest expense, net	310			(39		)	209			—			480
Other (income) expense, net	4			(10		)	(80		)	—			(86		)
Total expenses	5,222			1,114			3,152			(2,691		)	6,797
Income (loss) from continuing operations before income taxes and equity in earnings (losses) of subsidiaries	(1,690		)	36			1,651			—			(3		)
(Provision) benefit for taxes on income (loss) of continuing operations	831			(28		)	(836		)	—			(33		)
Equity in earnings (losses) of subsidiaries, net of tax	810			317			—			(1,127		)	—
Net income (loss) from continuing operations	(49		)	325			815			(1,127		)	(36		)
Net income (loss) from discontinued operations	—			(3		)	(10		)	—			(13		)
Net income (loss)	(49		)	322			805			(1,127		)	(49		)
Other comprehensive income (loss), net of tax	27			(5		)	45			(40		)	27
Comprehensive income (loss)	$	(22	)	$	317		$	850		$	(1,167	)	$	(22	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2015

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	3,567		$	1,230		$	4,214		$	(2,020	)	$	6,991
Expenses:
Direct vehicle and operating	2,180			664			996			(2		)	3,838
Depreciation of revenue earning vehicles and lease charges, net	1,539			470			1,867			(2,017		)	1,859
Selling, general and administrative	405			57			231			(1		)	692
Interest expense, net	290			(19		)	176			—			447
Other (income) expense, net	8			(1		)	(37		)	—			(30		)
Total expenses	4,422			1,171			3,233			(2,020		)	6,806
Income (loss) from continuing operations before income taxes and equity in earnings (losses) of subsidiaries	(855		)	59			981			—			185
(Provision) benefit for taxes on income (loss) of continuing operations	206			(10		)	(229		)	—			(33		)
Equity in earnings (losses) of subsidiaries, net of tax	854			248			—			(1,102		)	—
Net income (loss) from continuing operations	205			297			752			(1,102		)	152
Net income (loss) from discontinued operations	—			56			(3		)	—			53
Net income (loss)	205			353			749			(1,102		)	205
Other comprehensive income (loss), net of tax	(75		)	(4		)	(78		)	82			(75		)
Comprehensive income (loss)	$	130		$	349		$	671		$	(1,020	)	$	130

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2016

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net cash provided by (used in) operating activities from continuing operations	$	(2,129	)	$	61		$	4,838		$	(719	)	$	2,051
Cash flows from investing activities:
Net change in restricted cash and cash equivalents	(36		)	—			45			—			9
Revenue earning vehicle expenditures	(285		)	(62		)	(8,903		)	—			(9,250		)
Proceeds from disposal of revenue earning vehicles	219			11			6,730			—			6,960
Capital asset expenditures, non-vehicle	(56		)	(13		)	(30		)	—			(99		)
Proceeds from disposal of property and other equipment	29			2			22			—			53
Purchases of shares in equity method investment	(45		)	—			—			—			(45		)
Sales of shares in equity method investment	—			—			233			—			233
Capital contributions to subsidiaries	(1,260		)	—			—			1,260			—
Return of capital from subsidiaries	2,516			—			—			(2,516		)	—
Loan to Parent / Guarantor from Non-Guarantor	—			—			(973		)	973			—
Net cash provided by (used in) investing activities from continuing operations	1,082			(62		)	(2,876		)	(283		)	(2,139		)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt	442			—			7,223			—			7,665
Repayments of vehicle debt	(433		)	—			(6,887		)	—			(7,320		)
Proceeds from issuance of non-vehicle debt	2,427			—			—			—			2,427
Repayments of non-vehicle debt	(3,684		)	—			—			—			(3,684		)
Capital contributions received from parent	—			—			1,260			(1,260		)	—
Loan to Parent / Guarantor from Non-Guarantor	973			—			—			(973		)	—
Payment of dividends and return of capital	(1		)	—			(3,234		)	3,235			—
Payment of financing costs	(45		)	(3		)	(25		)	—			(73		)
Early redemption premium payment	(13		)	—			—			—			(13		)
Transfers from discontinued entities	2,122			—			—			—			2,122
Advances to Hertz Global	(100		)	—			—			—			(100		)
Other	10			—			—			—			10
Net cash provided by (used in) financing activities from continuing operations	1,698			(3		)	(1,663		)	1,002			1,034
Effect of foreign exchange rate changes on cash and cash equivalents from continuing operations	—			—			10			—			10
Net increase (decrease) in cash and cash equivalents during the period from continuing operations	651			(4		)	309			—			956
Cash and cash equivalents at beginning of period	179			17			278			—			474
Cash and cash equivalents at end of period	$	830		$	13		$	587		$	—		$	1,430

Cash flows from discontinued operations:
Cash flows provided by operating activities	$	—		$	59		$	148		$	—		$	207
Cash flows used in investing activities	—			(75		)	(2		)	—			(77		)
Cash flows provided by (used in) financing activities	—			44			(138		)	—			(94		)
Net increase (decrease) in cash and cash equivalents during the period from discontinued operations	$	—		$	28		$	8		$	—		$	36

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2015

(In millions)



	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net cash provided by (used in) operating activities from continuing operations	$	(1,662	)	$	(57	)	$	4,448		$	(464	)	$	2,265
Cash flows from investing activities:
Net change in restricted cash and cash equivalents	27			3			248			—			278
Revenue earning vehicle expenditures	(299		)	(87		)	(9,092		)	—			(9,478		)
Proceeds from disposal of revenue earning vehicles	195			70			6,401			—			6,666
Capital assets expenditures, non-vehicle	(124		)	(2		)	(57		)	—			(183		)
Proceeds from disposal of property and other equipment	35			12			17			—			64
Capital contributions to subsidiaries	(2,006		)	—			—			2,006			—
Return of capital from subsidiaries	3,688			79			—			(3,767		)	—
Acquisitions, net of cash acquired	(17		)	(3		)	(75		)	—			(95		)
Loan to Parent / Guarantor from Non-Guarantor	—			—			(684		)	684			—
Sale of (investment in) shares in equity method investment	—			—			100			—			100
Advances to Old Hertz Holdings	(270		)	—			—			—			(270		)
Net cash provided by (used in) investing activities from continuing operations	1,229			72			(3,142		)	(1,077		)	(2,918		)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt	25			—			6,044			—			6,069
Repayments of vehicle debt	—			—			(5,223		)	—			(5,223		)
Proceeds from issuance of non-vehicle debt	1,457			—			—			—			1,457
Repayments of non-vehicle debt	(1,546		)	—			(1		)	—			(1,547		)
Capital contributions received from parent	—			—			2,006			(2,006		)	—
Loan to Parent / Guarantor from Non-Guarantor	684			—			—			(684		)	—
Payment of dividends and return of capital	—			—			(4,231		)	4,231			—
Payment of financing costs	—			(2		)	(9		)	—			(11		)
Transfer (to) from discontinued entities	—			(6		)	(36		)	—			(42		)
Net cash provided by (used in) financing activities from continuing operations	620			(8		)	(1,450		)	1,541			703
Effect of foreign exchange rate changes on cash and cash equivalents from continuing operations	—			—			(19		)	—			(19		)
Net increase (decrease) in cash and cash equivalents during the period from continuing operations	187			7			(163		)	—			31
Cash and cash equivalents at beginning of period	2			10			462			—			474
Cash and cash equivalents at end of period	$	189		$	17		$	299		$	—		$	505

Cash flows from discontinued operations:
Cash flows provided by operating activities	$	—		$	397		$	24		$	—		$	421
Cash flows used in investing activities	—			(406		)	(60		)	—			(466		)
Cash flows provided by (used in) financing activities	—			—			35			—			35
Effect of foreign exchange rate changes on cash and cash equivalents	—			—			(2		)	—			(2		)
Net increase (decrease) in cash and cash equivalents during the period from discontinued operations	$	—		$	(9	)	$	(3	)	$	—		$	(12	)