HERTZ GLOBAL HOLDINGS, INCHTZ
HERTZ GLOBAL HOLDINGS, INC Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets, Net
Recoverability of Goodwill and Indefinite-lived Intangible Assets
On an annual basis as of October 1, and at interim periods when circumstances require as a result of a triggering event as defined by ASC 350 - Intangibles, Goodwill and Other, the Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis. An impairment is deemed to exist if the carrying value of goodwill or indefinite-lived intangible assets exceed their fair value as determined using Level 3 inputs under the U.S. GAAP fair value hierarchy. The reviews of fair value involve judgment and estimates, including projected revenues, long-term growth rates, royalty rates and discount rates, which the Company deems reasonable for this purpose.
The Company performed the goodwill impairment analyses using the income approach, a measurement using Level 3 inputs under the U.S. GAAP fair value hierarchy. In performing the impairment analyses, the weighted-average cost of capital used in the discounted cash flow model was calculated based upon the fair value of the Company's debt and share price with a debt-to-equity ratio comparable to the vehicle rental car industry. This present value model requires management to estimate future cash flows and forecasted EBITDA margins and capital investments of each reporting unit. The assumptions the Company used to estimate future cash flows and EBITDA margins are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant. The discount rate used for each reporting unit ranged from 12.0% to 12.5%. Each of the Company's reporting units had a fair value that exceeded its respective carrying value, the lowest of which was greater than 25%.
The Company performed the intangible impairment analyses for indefinite-lived intangible assets using the relief-from-royalty income approach, a measurement using Level 3 inputs under the U.S. GAAP fair value hierarchy. The Company considered consistent factors as described above related to goodwill in addition to royalty rates. The assumptions the Company uses to estimate royalty rates are consistent with the assumptions that the reporting units use for internal planning purposes, which the Company believes would be generally consistent with that of a market participant. The discount rate used for each indefinite-lived intangible ranged from 12.0% to 13.0%. Each of the Company's indefinite-lived intangible assets had fair values that exceeded their respective carrying values by more than 25%.
Further deterioration in the Company’s cash flows or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. The Company will continue to closely monitor actual results versus its expectations and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital. If the Company's expectations of the operating results, both in magnitude or timing, do not materialize, or if its weighted average cost of capital increases, the Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.
Goodwill
The following summarizes the changes in the Company's goodwill by segment:
| (In millions) | Americas RAC segment | International RAC segment | Total | ||||||||||||||
Balance as of January 1, 2025 | |||||||||||||||||
| Goodwill | $ | 1,028 | $ | 236 | $ | 1,264 | |||||||||||
Accumulated impairment losses | — | (220) | (220) | ||||||||||||||
| 1,028 | 16 | 1,044 | |||||||||||||||
Goodwill disposal and other changes during the period(1) | 1 | — | 1 | ||||||||||||||
Balance as of December 31, 2025 | |||||||||||||||||
| Goodwill | 1,029 | 236 | 1,265 | ||||||||||||||
| Accumulated impairment losses | — | (220) | (220) | ||||||||||||||
| $ | 1,029 | $ | 16 | $ | 1,045 | ||||||||||||
(1) Primarily consists of changes resulting from the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period.
| (In millions) | Americas RAC segment | International RAC segment | Total | ||||||||||||||
Balance as of January 1, 2024 | |||||||||||||||||
| Goodwill | $ | 1,028 | $ | 236 | $ | 1,264 | |||||||||||
Accumulated impairment losses | — | (220) | (220) | ||||||||||||||
| 1,028 | 16 | 1,044 | |||||||||||||||
| Goodwill disposal and other changes during the period | — | — | — | ||||||||||||||
Balance as of December 31, 2024 | |||||||||||||||||
| Goodwill | 1,028 | 236 | 1,264 | ||||||||||||||
| Accumulated impairment losses | — | (220) | (220) | ||||||||||||||
| $ | 1,028 | $ | 16 | $ | 1,044 | ||||||||||||
Intangible Assets, Net
Intangible assets, net, consists of the following major classes:
| December 31, 2025 | |||||||||||||||||
| (In millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||
| Amortizable intangible assets: | |||||||||||||||||
| Customer-related | $ | 269 | $ | (269) | $ | — | |||||||||||
| Concession rights | 402 | (402) | — | ||||||||||||||
| Technology-related intangibles | 244 | (204) | 40 | ||||||||||||||
Other(1) | 33 | (33) | — | ||||||||||||||
| Total | 948 | (908) | 40 | ||||||||||||||
| Indefinite-lived intangible assets: | |||||||||||||||||
Tradenames(2) | 2,794 | — | 2,794 | ||||||||||||||
Other(3) | 24 | — | 24 | ||||||||||||||
| Total | 2,818 | — | 2,818 | ||||||||||||||
| Total intangible assets, net | $ | 3,766 | $ | (908) | $ | 2,858 | |||||||||||
| December 31, 2024 | |||||||||||||||||
| (In millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||
| Amortizable intangible assets: | |||||||||||||||||
| Customer-related | $ | 269 | $ | (269) | $ | — | |||||||||||
| Concession rights | 407 | (407) | — | ||||||||||||||
| Technology-related intangibles | 236 | (202) | 34 | ||||||||||||||
Other(1) | 36 | (35) | 1 | ||||||||||||||
| Total | 948 | (913) | 35 | ||||||||||||||
| Indefinite-lived intangible assets: | |||||||||||||||||
Tradenames(2) | 2,794 | — | 2,794 | ||||||||||||||
Other(3) | 23 | — | 23 | ||||||||||||||
| Total | 2,817 | — | 2,817 | ||||||||||||||
| Total intangible assets, net | $ | 3,765 | $ | (913) | $ | 2,852 | |||||||||||
(1) Other amortizable intangible assets primarily include reacquired franchise rights.
(2) As of December 31, 2025 and 2024, $2.2 billion was recorded in the Company's Americas RAC segment and $600 million in the Company's International RAC segment.
(3) Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Amortization of intangible assets | $ | 22 | $ | 25 | $ | 48 | |||||||||||
The following table summarizes the Company's expected amortization expense based on its amortizable intangible assets as of December 31, 2025:
| (In millions) | |||||
| 2026 | $ | 14 | |||
| 2027 | 10 | ||||
| 2028 | 6 | ||||
| 2029 | 2 | ||||
| 2030 | 2 | ||||
| After 2030 | 6 | ||||
| Total expected amortization expense | 40 | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 7, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 6, 2017 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.