What was the 'Long-Lived Assets impairment' expense for Dollar Rent A Car in 2024?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of December 31, 2024 and December 31, 2023 include total liabilities of VIEs of $1.4 billion and $1.7 billion, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation. See "Pledges Related to Vehicle Financing" in Note 7, "Debt," for further information.
THE HERTZ CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions)
| Years Ended December 31, | 1, | |||||
|---|---|---|---|---|---|---|
| 2024 | 24 2023 | 2022 | ||||
| Revenues | $ | 9,049 | $ | 9,371 | $ | 8,685 |
| Expenses: | ||||||
| Direct vehicle and operating | 5,689 | 5,455 | 4,808 | |||
| Depreciation of revenue earning vehicles and lease charges, net | 3,611 | 2,039 | 701 | |||
| Non-vehicle depreciation and amortization | 139 | 149 | 142 | |||
| Selling, general and administrative | 819 | 962 | 959 | |||
| Interest expense, net: | ||||||
| Vehicle | 590 | 555 | 159 | |||
| Non-vehicle | 369 | 238 |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the Long-Lived Assets impairment expense for the year ended December 31, 2024, was $1,048 million. This expense is a result of writing down the value of long-lived assets to their estimated fair values, which was determined effective August 31, 2024. The impairment was recognized due to a reduction in cash flow projections in the Americas RAC and International RAC segments.
The reduction in cash flow projections was largely attributed to the acceleration of the rental fleet rotation, which shortened the useful life of the vehicles and reduced potential future cash flows. Delays in operating cost improvements and longer timeframes for revenue maximization initiatives also contributed to the deteriorated cash flow projections. As a result, Dollar Rent A Car tested the recoverability of its long-lived assets, including revenue earning vehicles, ROU (Right-of-Use) assets, and property and equipment, and determined that an impairment existed.
The impairment charges included $923 million against revenue earning vehicles and $125 million against ROU assets. No impairment was recognized for property and equipment assets. The Americas RAC segment accounted for $865 million of the total impairment, while the International RAC segment accounted for $183 million. This significant impairment charge impacted Dollar Rent A Car's total expenses for 2024, contributing to a net loss of $3,137 million for the year.