CAR

New in FY2025

• In 2025, on average approximately 84% of our rental fleet was comprised of risk vehicles.
• Such production may be curtailed as a result of a wide range of factors, including impacts of a pandemic and supply chain impacts, including as a result of tariffs and shortages of parts such as semiconductor parts utilizing rare earth minerals, which have impacted certain manufacturers in the past.
• We are also exposed to risk to the extent that any auto manufacturer increases the cost of vehicles, including as a result of inflation, trade disputes, tariffs, labor shortages or disruptions, or supply chain disruptions, or declines to sell vehicles to us on terms or at prices consistent with past practice.
• Our vehicles have in the past and may in the future be subject to safety recalls by their manufacturers.
• Such recalls have an adverse impact on our business when we remove recalled vehicles from our rentable fleet.
• Recalls increase our costs, negatively impact our revenues and reduce our fleet utilization.
• If a large number of vehicles were to be the subject of one or more recalls, which has occurred in the past, or if needed replacement parts are not readily available to us, we may be unable to utilize recalled vehicles for a significant period of time.
• Any significant airline capacity reductions, airfare or related fee increases, reduced flight schedules, or any events that disrupt or reduce business or leisure air travel or weaken travel demand and tourism, globally or in the key areas in which we operate, such as work stoppages, government shutdowns, military conflicts, terrorist incidents, natural disasters, disease epidemics, or the response of governments to any such events, could have an adverse impact on our results of operations.
• Ongoing military conflicts, including in the Middle East and Eastern Europe, are causing uncertainty that may have an adverse impact on our business, financial condition and results of operations.
• The world economy and markets are experiencing volatility and disruption from ongoing military conflicts, including in the Middle East and Eastern Europe, the length and impact of which are highly unpredictable.
• If we are not adequately prepared to meet consumer demand for electric, hybrid and autonomous vehicles as such demand develops, including if we are unable to attain an optimal and consistently reliable charging infrastructure and systems, which will require substantial capital investment, or if consumer demand for electric, hybrid and autonomous vehicles fails to meet our expectations, including due to slower or inadequate investments in charging infrastructure by third parties, changes in governmental regulations, tax credits, rebates and subsidies, or changes in consumer sentiment, our financial condition or results of operations could be adversely impacted.
• Additionally, federal and state administrations have introduced additional uncertainty for the electric vehicle (“EV”) industry.
• Any unavailability, reduction or elimination of government and economic incentives, including tax credits, because of policy changes, or other reasons, may result in the diminished value of our EV fleet.
• Additionally, federal, state, and local laws may impose additional barriers to EV adoption, including additional costs.
• For example, many states have enacted or proposed laws imposing additional registration fees for certain hybrids and EVs to support transportation infrastructure, such as highway repairs and improvements, which have traditionally been funded through federal and state gasoline taxes.
• These policy changes may be implemented more rapidly than we are able to change the composition of our fleet.
• Any of the foregoing, and any resulting mismatches between the vehicles in our fleet, consumer preferences and government policies, could materially and adversely affect the growth of the EV market and value of EVs and our financial condition and results of operations.
• In addition, during the fourth quarter of 2025, in conjunction with the Interpace Ventures transaction, we shortened the useful life associated with certain EV rental car vehicles, which resulted in an impairment charge.
• RISKS RELATED TO LEGAL, REGULATORY AND CORPORATE RESPONSIBILITY RELATED MATTERS Costs associated with lawsuits, investigations or increases in legal reserves that we establish based on our assessment of contingent liabilities may have an adverse effect on our results of operations.
• We are or may be subject to complaints and/or litigation involving our customers, licensees, employees, independent operators and others with whom we conduct business and other third parties, including claims for bodily injury, death and property damage related to use of our vehicles or our locations, or claims based on allegations of discrimination, misclassification as exempt, wage and hour pay disputes or allegations related to our business practices, claims based on allegations of omission or misstatements in our policies and/or public filings, and various other claims.
• Governments may continue to pursue measures related to climate change and greenhouse gas emissions, including vehicle travel restrictions.
• We face risks related to Corporate Responsibility matters.
• Climate change, societal expectations for companies to address environmental and social matters, and the changing public interest and regulations and laws relating to Corporate Responsibility matters and disclosures and otherwise, both domestically (including in California) and globally (especially in the European continent) pose risks to our business.
• Additionally, these factors, as well as our action or inaction with respect to Corporate Responsibility matters, may result in heightened regulatory or public scrutiny, increased litigation, reputational damage, and adverse effects on our revenue, stock price and/or access to capital markets.
• We have developed certain initiatives, goals and practices relating to Corporate Responsibility matters.
• If our Corporate Responsibility initiatives, goals, and practices do not meet our expectations, those of our investors or other stakeholders, or requirements of local rules and regulations, each of which continue to evolve, we may incur additional costs, and our brand, reputation and results of operations and financial condition may be adversely impacted.
• In addition, federal, state and local regulatory authorities, private organizations and individuals have challenged companies’ approaches to Corporate Responsibility issues and may challenge ours, including by alleging that we failed in our efforts or should not have undertaken such efforts, in the manner we have done so or at all.
• Any of the foregoing could lead to reputational harm.
• We face risks associated with changes in tax laws, including the expiration of tax credits.
• During 2023, the full expensing provision started to phase-out ratably by 20% each year; however, in July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, making permanent key provisions of the Tax Act, including full expensing for qualified property, thereby eliminating the scheduled phase-out.
• The Inflation Reduction Act of 2022 (the “IRA”) included a 15% corporate alternative minimum tax on certain large corporations and a 1% excise tax on certain corporate stock repurchases.
• The impact on the Company of these provisions, which became effective on January 1, 2023, will depend on several factors, including recently released and forthcoming interpretive regulatory guidance, as well as recent legislative changes, such as those implemented under the OBBBA.
• Additionally, certain tax credits and other incentives for EVs that have been available in the past have been modified or have been phased out, which may have an adverse impact on demand for EVs.
• For example, the OBBBA, which eliminated, limited or phased out certain tax credits that had previously provided significant benefits to lessees and purchasers of EVs and added new eligibility requirements on manufacturers to continue claiming tax credits on EV components.
• It also eliminated certain penalties for noncompliance with certain fuel efficiency standards and introduced certain key tax law modifications.
• A reduction in value of the EV market generally may have an adverse effect our financial condition, results of operations, liquidity, and cash flows.
• See “Risks Related to the Nature of Our Business – We face risks related to vehicle electrification.” RISKS RELATED TO OUR CAPITAL STRUCTURE AND INDEBTEDNESS We face risks related to our current and future debt obligations, including risks related to conditions in the credit and asset-backed securities markets.
• As of December 31, 2025, our total outstanding debt of approximately $25.4 billion included unhedged interest rate sensitive debt of approximately $5.9 billion.
• During our seasonal borrowing peak in 2025, outstanding unhedged interest rate sensitive debt totaled approximately $6.2 billion.
• As of December 31, 2025, approximately $757 million remains available under the Share Repurchase Program.

and 4 more.

Gone since FY2024

• In 2024, on average approximately 90% of our rental fleet was comprised of risk vehicles.
• Such production may be curtailed as a result of a wide range of factors, including impacts of a pandemic and supply chain impacts, including as a result of tariffs and shortages of parts, which have impacted certain manufacturers in the past.
• We are also exposed to risk to the extent that any auto manufacturer increases the cost of vehicles, including as a result of inflation, tariffs, labor shortages or disruptions, or supply chain disruptions, or declines to sell vehicles to us on terms or at prices consistent with past practice.
• Our vehicles may be subject to safety recalls by their manufacturers, which could have an adverse impact on our business when we remove recalled vehicles from our rentable fleet.
• As such, recalls can increase our costs, negatively impact our revenues and/or reduce our fleet utilization.
• If a large number of vehicles were to be the subject of one or more recalls, or if needed replacement parts were not in adequate supply, we may be unable to utilize recalled vehicles for a significant period of time.
• Any significant airline capacity reductions, airfare or related fee increases, reduced flight schedules, or any events that disrupt or reduce business or leisure air travel or weaken travel demand and tourism, globally or in the key areas in which we operate, such as work stoppages, military conflicts, terrorist incidents, natural disasters, disease epidemics, or the response of governments to any such events, could have an adverse impact on our results of operations.
• Ongoing military conflicts, including in Eastern Europe, are causing uncertainty that may have an adverse impact on our business, financial condition and results of operations.
• The world economy and markets are experiencing volatility and disruption from ongoing military conflicts, including in Eastern Europe, the length and impact of which are highly unpredictable.
• Worldwide demand for electric and hybrid vehicles continues to increase, and manufacturers continue to invest more time and cost into producing these types of vehicles in an effort to reduce fuel consumption and greenhouse gas emissions, as mandated by various governmental standards and regulations.
• If we are not adequately prepared to meet consumer demand for electric, hybrid and autonomous vehicles as such demand develops, including if we are unable to attain an optimal and consistently reliable charging infrastructure and systems, which will require substantial capital investment, or if consumer demand for electric, hybrid and autonomous vehicles fails to meet our expectations, including due to slower or inadequate investments in charging infrastructure by third parties, changes in governmental regulations, rebates and subsidies, or changes in consumer sentiment, our financial condition or results of operations could be adversely impacted.
• RISKS RELATED TO LEGAL, REGULATORY AND ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (“ESG”) RELATED MATTERS Costs associated with lawsuits, investigations or increases in legal reserves that we establish based on our assessment of contingent liabilities may have an adverse effect on our results of operations.
• We are or may be subject to complaints and/or litigation involving our customers, licensees, employees, independent operators and others with whom we conduct business and other third parties, including claims for bodily injury, death and property damage related to use of our vehicles or our locations, or claims based on allegations of discrimination, misclassification as exempt, wage and hour pay disputes or allegations related to our business practices, and various other claims.
• Governments are likely to continue to pursue measures related to climate change and greenhouse gas emissions, including vehicle travel restrictions.
• The growing focus on climate change, heightened societal expectations for companies to address environmental and social matters, and the proliferation of ESG related regulations and laws relating to disclosures and otherwise, both domestically (including in California) and globally (especially in the European continent) pose risks to our business.
• Additionally, these factors, as well as our action or inaction with respect to ESG matters, may result in heightened regulatory or public scrutiny, increased litigation, reputational damage, and adverse effects on our revenue, stock price and/or access to capital markets.
• We have developed certain initiatives, goals and practices relating to ESG matters.
• If our ESG initiatives, goals, and practices do not meet our expectations, those of our investors or other stakeholders, or requirements of local rules and regulations, each of which continue to evolve, we may incur additional costs, and our brand, reputation and results of operations and financial condition may be adversely impacted.
• In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
• Such ratings are used by some investors to inform their investment and voting decisions.
• Unfavorable ESG ratings and investment community divestment initiatives may lead to negative publicity or investor sentiment toward us and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
• We face risks associated with changes in tax laws.
• During 2023, the full expensing provision started to phase-out ratably by 20% each year between 2023 and 2027.
• The Inflation Reduction Act of 2022 (the “IRA”) includes a 15% corporate alternative minimum tax on certain large corporations and a 1% excise tax on certain corporate stock repurchases.
• The impact on the Company of these provisions, which became effective on January 1, 2023, will depend on several factors, including recently released and forthcoming interpretive regulatory guidance.
• RISKS RELATED TO OUR CAPITAL STRUCTURE AND INDEBTEDNESS We face risks related to our current and future debt obligations, including risks related to conditions in the credit and asset-backed securities markets.
• As of December 31, 2024, our total outstanding debt of approximately $23.1 billion included unhedged interest rate sensitive debt of approximately $4.1 billion.
• During our seasonal borrowing peak in 2024, outstanding unhedged interest rate sensitive debt totaled approximately $6.4 billion.
• As of December 31, 2024, approximately $757 million remains available under the Share Repurchase Program.
• Under the terms of the Fourth Amended and Restated Cooperation Agreement between the Company and SRS, SRS has committed, with respect to shares of common stock SRS holds in excess of 35% of the Company’s outstanding common stock, to exercise its voting rights in the same proportion in which other shares of common stock are voted.
• We may experience system interruptions or disruptions for a variety of reasons, including from network failures, power outages, cyber-attacks, human error or misuse, software errors, an unusually high volume of visitors attempting to access our systems, or other events such as fire, explosions, earthquakes, storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts.
• In addition, anyone who is able to circumvent our security measures or gain unauthorized access to our systems or information or those of our third-party service providers despite such security measures, could misappropriate proprietary information or cause interruptions in our operations.
• A cybersecurity breach resulting in the unauthorized use or disclosure of certain personal information could put individuals at risk of identity theft and financial or other harm and result in costs to the Company in investigation, remediation, legal defense and in liability to parties who are financially harmed.