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Herc Holdings Inc.
Investor Presentation
March 22 -23, 2017
NYSE: HRI
Safe Harbor Statements
2
Basis of Presentation
The financial information included in this presentation is based upon the condensed consolidated and combined financial statements of the Company which are
presented on a basis of accounting that reflects a change in reporting entity and have been adjusted for the effects of the spin-off, which effected our separation
from Hertz Rental Car Holding Company, Inc. (“New Hertz”). These financial statements and financial information represent only those operations, assets, liabilities
and equity that form Herc Holdings on a stand-alone basis. Since the spin-off occurred on June 30, 2016, the financial statements represent the carve-out financial
results for the Company for the first six months of 2016, including spin-off impacts through June 30, 2016, and actual results for the second half of 2016, including
the three months ended December 31, 2016. All prior period amounts represent carve-out financial results.
Forward-Looking Statements
This presentation contains statements that are not statements of historical fact, but instead are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. We caution readers not to place undue reliance on these statements, which speak only as of the date hereof. There are a
number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking
statements, including those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (the “Form 10-K”) in Part I under
Item 1A “Risk Factors,” including:
Risks related to material weaknesses in our internal control over financial reporting and the restatement of financial statements previously issued by Hertz Global
Holdings, Inc. (in its form prior to the spin-off, “Hertz Holdings”), including that: we have identified material weaknesses in our internal control over financial
reporting that may adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, which may adversely
affect investor and lender confidence in us and, as a result, the value of our common stock and our ability to obtain future financing on acceptable terms, and we
may identify additional material weaknesses as we continue to assess our processes and controls as a stand-alone company with lower levels of materiality;
such material weaknesses could result in a material misstatement of our consolidated and combined financial statements that would not be prevented or
detected; we continue to expend significant costs and devote management time and attention and other resources to matters related to our internal control over
financial reporting and Hertz Holdings' restatement, which could adversely affect our ability to execute our strategic plan; our efforts to design and implement an
effective control environment may not be sufficient to remediate the material weaknesses or prevent future material weaknesses; our material weaknesses and
Hertz Holdings' restatement could expose us to additional risks that could materially adversely affect our financial position, results of operations and cash flows,
including as a result of events of default under the agreements governing our indebtedness and/or government investigations, regulatory inquiries and private
actions; we may experience difficulties implementing new information technology systems to maintain our books and records and provide operational information
to our management team; if we decide to not implement the new operational system for our back office processes, we could need to expense items that were
previously capitalized, which could result in a substantial charge in our results of operations; we could experience disruptions to our control environment in
connection with the relocation of our Shared Services Center, including as a result of the failure to retain key employees who possess specific knowledge or
expertise necessary for the timely preparation of our financial statements; and Hertz Holdings' restatement has resulted in government investigations, books and
records demands, and private litigation and could result in government enforcement actions and private litigation that could have a material adverse impact on
our results of operations, financial condition, liquidity and cash flows;
NYSE: HRI
Safe Harbor Statements - Continued
3
Risks related to the spin-off, which effected our separation from New Hertz, such as: we receive certain transition services from New Hertz pursuant to the
transition services agreement covering IT services and other areas, which impact our control environment and, therefore, our internal control over financial
reporting; we have limited operating history as a stand-alone public company, and our historical financial information for periods prior to July 1, 2016, is not
necessarily representative of the results that we would have achieved as a separate, publicly traded company, and may not be a reliable indicator of our future
results; the liabilities we have assumed and will share with New Hertz in connection with the spin-off could have a material adverse effect on our business,
financial condition and results of operations; if there is a determination that any portion of the spin-off transaction is taxable for U.S. federal income tax purposes,
including for reasons outside of our control, then we and our stockholders could incur significant tax liabilities, and we could also incur indemnification liability if
we are determined to have caused the spin-off to become taxable; if New Hertz fails to pay its tax liabilities under the tax matters agreement or to perform its
obligations under the separation and distribution agreement, we could incur significant tax and other liability; our ability to engage in financings, acquisitions and
other strategic transactions using equity securities is limited due to the tax treatment of the spin-off; the loss of the Hertz brand and reputation could materially
adversely affect our ability to attract and retain customers; the spin-off may be challenged by creditors as a fraudulent transfer or conveyance; and if the spin-off
is not a legal dividend, it could be held invalid by a court and have a material adverse effect on our business, financial condition and results of operations;
Business risks could have a material adverse effect on our business, results of operations, financial condition and/or liquidity, including:
o the cyclicality of our business, a slowdown in economic conditions or adverse changes in the economic factors specific to the industries in which we
operate, in particular industrial and construction;
o the dependence of our business on the levels of capital investment and maintenance expenditures by our customers, which in turn are affected by
numerous factors, including the level of economic activity in their industries, the state of domestic and global economies, global energy demand, the
cyclical nature of their markets, expectations regarding government spending on infrastructure improvements or expansions, their liquidity and the
condition of global credit and capital markets;
o we may have difficulty obtaining the resources that we need to operate, or our costs to do so could increase significantly;
o intense competition in the industry, including from our own suppliers, that may lead to downward pricing or an inability to increase prices;
o any occurrence that disrupts rental activity during our peak periods given the seasonality of the business, especially in the construction industry;
o doing business in foreign countries exposes us to additional risks, including under laws and regulations that may conflict with U.S. laws and those under
anticorruption, competition, economic sanctions and anti-boycott regulations;
o our success as an independent company will depend on our new senior management team, the ability of other new employees to learn their new roles,
and our ability to attract and retain key management and other key personnel;
o some or all of our deferred tax assets could expire if we experience an “ownership change” as defined in the Internal Revenue Code;
o changes in the legal and regulatory environment that affect our operations, including with respect to taxes, consumer rights, privacy, data security and
employment matters, could disrupt our business and increase our expenses;
o an impairment of our goodwill or our indefinite lived intangible assets could have a material non-cash adverse impact;
NYSE: HRI
Safe Harbor Statements - Continued
4
o other operational risks such as: any decline in our relations with our key national account customers or the amount of equipment they rent from us; our
equipment rental fleet is subject to residual value risk upon disposition, and may not sell at the prices we expect; we may be unable to protect our trade
secrets and other intellectual property rights; we may fail to respond adequately to changes in technology and customer demands; our business is heavily
reliant upon communications networks and centralized information technology systems and the concentration of our systems creates or increases risks for
us, including the risk of the misuse or theft of information we possess, including as a result of cyber security breaches or otherwise, which could harm our
brand, reputation or competitive position and give rise to material liabilities; failure to maintain, upgrade and consolidate our information technology
networks could materially adversely affect us; we may face issues with our union employees; we are exposed to a variety of claims and losses arising from
our operations, and our insurance may not cover all or any portion of such claims; environmental, health and safety laws and regulations and the costs of
complying with them, or any change to them impacting our customers’ markets could materially adversely affect us; decreases in government spending
could materially adversely affect us; maintenance and repair costs associated with our equipment rental fleet could materially adversely affect us; and
strategic acquisitions could be difficult to identify and implement and could disrupt our business or change our business profile significantly;
Risks related to our substantial indebtedness, such as: our substantial level of indebtedness exposes us or makes us more vulnerable to a number of risks that
could materially adversely affect our financial condition, results of operations, cash flows, liquidity and ability to compete; the secured nature of our indebtedness,
which is secured by substantially all of our consolidated assets, could materially adversely affect our business and holders of our debt and equity; an increase in
interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability; and any additional debt we incur could
further exacerbate these risks;
Risks related to the securities market and ownership of our stock, including that: the market price of our common stock may fluctuate significantly; the market
price of our common stock could decline as a result of the sale or distribution of a large number of our shares or the perception that a sale or distribution could
occur and these factors could make it more difficult for us to raise funds through future stock offerings; and provisions of our governing documents could
discourage potential acquisition proposals and could deter or prevent a change in control; and
Other risks and uncertainties set forth in the Form 10-K and in our other filings with the Securities and Exchange Commission (“SEC”).
All forward-looking statements are expressly qualified in their entirety by such cautionary statements. We do not undertake any obligation to release publicly any
update or revision to any of the forward-looking statements.
NYSE: HRI
Information Regarding Non-GAAP Financial Measures
5
In addition to results calculated according to accounting principles generally accepted in the United States (“GAAP”), the Company has provided certain information
in this presentation which is not calculated according to GAAP (“non-GAAP”), such as adjusted EBITDA and free cash flow. Management uses these non-GAAP
measures to evaluate operating performance and period-over-period performance of our core business without regard to potential distortions, and believes that
investors will likewise find these non-GAAP measures useful in evaluating the Company’s performance. These measures are frequently used by security analysts,
institutional investors and other interested parties in the evaluation of companies in our industry.
Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may
not be comparable to similarly titled measures of other companies. For the definitions of these terms, further information about management’s use of these
measures as well as a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures, please see the Appendix to this
presentation.
NYSE: HRI
We aspire to be the
supplier, employer and
investment of choice in
our industry.
Became a Stand-alone Public Company in 2016
6
• Recruited experienced and industry savvy senior
management team to lead separation from
Hertz’s rental car business
• Separated from Hertz on June 30, 2016
• Began trading on the NYSE on July 1 under the
symbol “HRI”
• Rebranded U.S. retail locations to Herc Rentals
• Successfully running the business as an
independent company
NYSE: HRI
Carlo Cavecchi Paul Dickard Elizabeth Higashi Charles Miller Nancy Merola Jason Oosterbeek
VP, ProSolutions VP, Communications VP, Investor Relations VP, Operations VP, Chief
Accounting Officer
VP, Pricing &
Sales Strategy
30+ years 25 years 30+ years 30+ years 30+ years 15+ years
Highly Experienced Leadership Team
Industry savvy and experienced leadership team
EXECUTIVE LEADERSHIP
CEO, COO & CIO Have More Than 30 Years of Relevant Experience
Senior Staff Average Over 26 Years of Equipment and Related Industry Experience
Larry Silber
CEO
35+ years
Bruce Dressel
COO
30+ years
Chris Cunningham
CHRO
30+ years
Richard Marani
CIO
30+ years
Maryann Waryjas
CLO
30+ years
Barbara Brasier
CFO
30+ years
Regional Vice Presidents - Average of 25 Years of Industry Experience
7
NYSE: HRI
Reinvigorated Organization With a Customer-Centric Culture and
Increased Focus on Operating Efficiency and Safety
Our
Vision
To ensure that end users
of our equipment and
services achieve optimal
performance safely,
efficiently and effectively.
Our
Mission
Our
Values
We do what’s right.
We’re in this together.
We take responsibility.
We achieve results.
We prove ourselves every day.
We aspire to be the
supplier, employer and
investment of choice in
our industry.
8
NYSE: HRI
ProSolutions and
ProContractor
18%
Core
82%
Company Overview
9
Construction
37%
Other Customers
43%
Industrial
20%
One of the leading North American
equipment rental companies
Approximately 270 locations globally
3% market share in a highly
fragmented market
$3.56 billion in fleet (OEC)
~4,800 employees
$1.6 billion in total revenue (2016)
Upstream Oil
& Gas
17%
Key
Markets
83%
Local Customer
52%
National Account
48%
Herc Rentals is a diversified equipment rental company with a balanced business profile
Company Snapshot N.A. Market Share 1 Rental Revenue by Market 2
Business Mix by Revenue2 N.A. Customer Mix 2 Fleet Mix by OEC3
1 Company estimates based on data from American Rental Association (ARA), IHS Global Insight, Rental Equipment Register (RER), Jefferies and competitors’ public presentations.
2 FY 2016 rental revenue.
3 Original equipment cost (OEC) as of 12/31/2016 per ARA guidelines.
12%
7%
3%
9%
69%
2016 Market Size: ~$49 billion
Top 4-10
Rest of
Market
United
Rentals
Sunbelt Rentals
NYSE: HRI
Market Leader with Significant Scale and Broad Footprint
10
Approximately 270 locations in North America
NYSE: HRI
Industry Outlook Highlights
11
Positive market growth and further penetration of rental solutions expected to continue
1 The American Institute of Architects (AIA).
2 ARA / IHS Global Insight as of February 2017, excludes Party & Event data.
3 Dodge Analytics.
4 Industrial information resources.
$38
$31 $32
$35
$38
$41
$44
$47 $49
$51 $53
$56 $58
08 09 10 11 12 13 14 15 16 17E 18E 19E 20E
($ in billions)
N.A. Equipment Rental Market 2
as of February 2017
Non-Residential Starts 3
Architecture Billings Index 1
Industrial Spending 4
$297.9
$310.4
2016 2017E
J
a
n
-9
6
J
a
n
-0
0
J
a
n
-0
4
J
a
n
-0
8
J
a
n
-1
2
J
a
n
-1
6
50
$235
$249
$272
$281
$100
$150
$200
$250
$300
$350
2016 2017E 2018E 2019E
($ in millions)
Jan
49.5
as of Q1 2017
as of January 2017
as of Q1 2017
($ in millions)
• Key industry metrics
remain positive – non-
res construction growth
of 4.6% projected
through 2019
• American Rental
Association (ARA)
forecasts North
American equipment
rental growth of 4.4%
through 2020
• Industrial spending is
expected to grow 4.2%
in 2017
• Continuing shift from
ownership to rental will
fuel growth
NYSE: HRI
Strategic Direction
12
Disciplined
Capital
Management
Expand and
Diversify
Revenues
Improve
Operating
Efficiencies
Enhance
Customer
Experience
On the Path Forward
• Broaden
customer base
• Expand
products and
services
• Increase
density
• Grow ancillary
revenues
• Improve vendor
management
and fleet
availability
• Drive operating
performance
through mix
and volume
• Focus on safety
and labor
productivity
• Provide
premium
products and
services
• Introduce
innovative
technology
solutions
• Drive EBITDA
margin growth
• Improve key
financial
metrics
NYSE: HRI
Expand and Diversify Revenues: Broaden the Customer Base
13
• Building Services
• Convention and
Trade Shows
• Repair Services
• Flooring
Contractors
• Facilities Support
Services
• Carpentry
Contractors
• Personal and
Household
Goods Repair
and Maintenance
• Finish Carpentry
Contractors
• Residential
Remodelers
• Masonry
Contractors
• Structural
Contractors
• All Specialty Trade
Contractors
• Electrical
Contractors
• Site Preparation
Contractors
• Industrial
Building
Construction
• Landscape and
Gardening
Contractors
• Plumbing
Contractors
• Heating
Contractors
• Air-Conditioning
Contractors
• Water and Sewer
Line Contractors
ProContractor Tools
NYSE: HRI
Expand and Diversify Revenues:
Expand Products and Services with ProSolutionsTM
14
PUMPPOWER INDUSTRIAL TOOLS
AIR CONDITIONERS
PORTABLES
DEHUMIDIFICATIONCHILLERS HEAT
NYSE: HRI
Expand and Diversify Revenues: Increase Density in High Growth
Urban Markets and Focus on Higher Margin Equipment
1 Industry data and estimates for rates and time utilization
OEC $136,000
Monthly Rate $4,200
Time Utilization 75.0%
Estimated Annual
Revenue
$37,800
Estimated $ Ute 28%
OEC $10,500
Monthly Rate $1,600
Time Utilization 60.0%
Estimated Annual
Revenue
$11,520
Estimated $ Ute 110%
One Wheel Loader = $136,000 13 Floor Scrubbers = $136,500
Estimated Annual Revenue
= $37,800
Estimated Annual Revenue
= $149,760
Comparative Estimated Revenue and $ Utilization1
15
Focusing on High Growth Urban Markets
NYSE: HRI
Q2 2015 Q1 20164 2016
Improve Operating Efficiencies: Improve Vendor Management
and Fleet Availability
Driving operational gains through buying efficiency and increased availability
Consolidate Brands and OEMs Increase Fleet Available to Rent
40%
# of Suppliers
Lower vendor count = better leverage
Simplification = lower operating expenses
Lower FUR = lower capex and higher ROIC
1 point of FUR reduction = $35M Fleet available
Fleet Unavailable for Rent (FUR)
~
19% 18%
15%
13%
10%
2013 2014 2015 1Q2016 Target2016
16
Average Annual FUR
NYSE: HRI
Enhance Customer Experience: Become the Supplier of Choice
Best in class brands combined with a comprehensive suite of services
help customers work more efficiently, effectively and safely
Consultive solutions Subject-matter experts
Delivering Premium Products
Delivering Solutions-Based Products and Services
Providing Technology Solutions to Enhance Customer Experience
Mobile App allows customers to order and manage fleet from anywhere
ProControl™ advanced telematics provides:
o Equipment location and search
o Utilization and meter reading
o Geo-fencing
o Alerts
o Customized dashboards
17
NYSE: HRI
Disciplined Capital Management: Drive EBITDA Growth
Long term, Adjusted EBITDA is targeted to meet or exceed peer metrics
with ROIC expected to exceed cost of capital
Improvement Opportunity Initiatives underway
Shift Equipment Portfolio Mix
Adding ProSolutions and ProContractor Tools equipment to fleet
expected to improve $ utilization
Ancillary Revenue
Driving transportation, Rental Protection Plan and other ancillary
revenue
Branch Density / Scale Maximizing operational leverage
Labor Productivity Improving Field Labor productivity in O&G and Non O&G markets
Leverage Buying Power Realizing procurement savings through vendor consolidation
Price and Yield Utilizing proprietary tool to maximize yield
Operational Efficiency
Reducing internal and external repair costs, improving warranty
recovery, and increasing productivity
18
NYSE: HRI
On the Path Forward
NYSE: HRI
Transformation in Process
20
Executing our strategy and driving improvements in
operating performance
Successfully diversifying fleet mix to higher dollar
utilization equipment categories
Achieving above market growth in major urban
locations
Growing local rental revenues faster than growth in
national accounts
Improving fleet availability
Reducing equipment, parts and service costs
through better vendor management
Enhancing customer service through key initiatives
such as premium brands and new technologies
Implementing actions to remediate the identified
material weaknesses and improve the effectiveness
of our internal control over financial reporting
NYSE: HRI
Expand and Diversify Revenues
21
Increased sales force as part of territory
optimization to drive revenue growth
Continued to successfully diversify fleet to
attract “square-footage-under-roof”
customers
Shifted to higher $ Utilization equipment
showing results in major urban locations
Increased Local as a % of total rental to
53% in the fourth quarter
Increased ancillary revenue 15% in the
quarter and 17% for the year compared
with 2015
• Broaden
customer base
• Expand
products and
services
• Increase
density
• Grow ancillary
revenues
Key Accomplishments
NYSE: HRI
Diversifying the Fleet to Maximize Dollar Utilization
22
Aerial - Booms
19.3%
Aerial -
Scissors &
Other
6.4%
Earthmoving -
Heavy
10.7%
Earthmoving -
Compact
7.5%Material Handling -
Telehandlers
13.5%
Material
Handling -
Industrial
3.2%
Trucks and
Trailers
12.9%
ProSolutions
13.4%
ProContractor
4.7%
Air
Compressors
3.0%
Other
2.0%
Lighting
1.7%
Compaction
1.7%
Aerial - Booms
20.3%
Aerial -
Scissors &
Other
5.7%
Earthmoving -
Heavy
12.4%
Earthmoving -
Compact
6.5%
Material Handling -
Telehandlers
13.9%
Material
Handling -
Industrial
3.1%
Trucks and
Trailers
13.8%
ProSolutions
12.4%
ProContractor
3.4%
Air
Compressors
3.1%
Other
2.1%
Lighting
1.7%
Compaction
1.6%
OEC as of 12/31/2015 OEC as of 12/31/2016
Reduced
• Aerial - Booms
• Earthmoving - Heavy
• Material Handling - Telehandlers
Increased
• Aerial - Scissor Lifts
• Earthmoving - Compact
• ProContractorTM and ProSolutionsTM
NYSE: HRI
Improve Operating Efficiencies
23
Reduced FUR to 15.3% in December 2016 compared to
15.9% in the prior year
Improved fleet, parts and service costs through vendor
management
Focused on enhancing salesforce effectiveness through by
driving the right behaviors
Continued to improve safety performance and enhance
safety culture – 45,000 hours of safety training in FY 2016
• Improve vendor
management
and fleet
availability
• Drive operating
performance
through mix and
volume
• Focus on safety
and labor
productivity
Key Accomplishments
NYSE: HRI
Enhance Customer Experience
24
Expanded ProSolutions Centers of
Excellence to approximately 30 locations
Continued to upgrade branches to
showcase ProContractor equipment
Focused on maintenance and service
initiatives to better serve customers
Shifted core OEC categories to premium
equipment that has broader customer
appeal
Rolled out ProControl™ telematics to
strategic customers
• Provide
premium
products and
services
• Introduce
innovative
technology
solutions
Key Accomplishments
NYSE: HRI
Financial Overview
25
NYSE: HRI
Financial Highlights
26
Q4 2016 FY 2016
Equipment Rental
Revenues
$356.7 million $1,352.7 million
Equipment Rental
Revenue Growth1
+ 6.2% in Key Markets2;
84% of total
+ 1.3% YoY Overall2
+ 8.1% in Key Markets2;
83% of total
+ 0.5% YoY Overall2
Pricing
+ 1.5% YoY in Key Markets
+ 0.5% YoY Overall
+ 1.6% YoY in Key Markets
+ 0.3% YoY Overall
Net Income (Loss) ($13.2) million ($19.7) million
Adjusted EBITDA3
$145.7 million
36.0% margin
$536.2 million
34.5% margin
1 Excluding operations in France & Spain and impact of foreign currency translation.
2 Key markets are defined as markets we currently serve outside of upstream oil and gas markets, overall refers to all markets.
3 For a reconciliation to the most comparable GAAP financial measure, see the Appendix.
NYSE: HRI
Q4 and Full Year Equipment Rental Revenues
27
$ in millions
Equipment rental revenue increased +6.2%
in key markets, excluding divestitures and
currency
Key markets represented 84% of rental
revenue
• Key markets increase attributable to:
- Traction of urban market strategy
- ProSolutions growth year-over-year
- Core business improvement
Pricing increased 1.5% YoY in key markets
and 0.5% overall
Equipment rental revenue increased +8.1% in
key markets, excluding divestitures and
currency
Key markets represented 83% of rental
revenue
Rate of oil and gas decline continues to
diminish as comparable periods are lapped
Q4 Equipment Rental Revenue Bridge
Full Year Equipment Rental Revenue Bridge
Q4 Summary
Full Year Summary
$ 356.7
$7.0 $13.0
$17.5$359.2
0
50
100
150
200
250
300
350
400
2015 France & Spain and
currency translation
Key markets Oil and gas 2016
$1,352.7
$66.2 $77.9
$85.1
$1,411.7
800
900
1,000
1,100
1,200
1,300
1,400
1,500
2015 France & Spain and
currency translation
Key markets Oil and gas 2016
NYSE: HRI
Q4 and Full Year Total Revenues
28
2015 included revenue from divested
foreign operations
Sales of revenue earning equipment
declined YoY due to high volume of
disposals from oil & gas regions in 2015
New equipment sales were also lower due
to focus on higher-margin rental activities
Q4 Total Revenue Bridge
Full Year Total Revenue Bridge
$ in millions
Q4 and Full Year Summary
$405.2
$10.4 $5.1
$6.2
$4.5$422.4
200
250
300
350
400
450
2015 France & Spain and
currency translation
Equipment rental
revenue
Sales of revenue
earning equipment
Sales of new
equipment and other
2016
$1,554.8
$77.9 $31.2
$21.5
$7.2
$1,678.2
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
2015 France & Spain and
currency translation
Equipment rental
revenue
Sales of revenue
earning equipment
Sales of new
equipment and other
2016
NYSE: HRI
Q4 and Full Year Net Income
29
$ in millions
2015 included Q4 gain on divestiture
Interest expense for second half 2016
reflects debt on a stand-alone basis
Fleet depreciation increased due to fleet
growth and normal course rate review
Losses on sales of revenue earning
equipment diminished in second half
Increase in spin-off costs: IT and
professional expenses related to the spin
transaction
Q4 and Full Year Summary
1 Interest expense, depreciation of REE and losses on sales of REE attributable to
France & Spain are included in the category labeled “France & Spain and currency
translation.”
$(19.7)
$43.8
$24.1
$31.1
$23.5
$56.2
$30.8
$16.9
$111.3
(35)
(15)
5
25
45
65
85
105
125
2015 France & Spain
and currency
translation
Tax expense Depr.
of REE
All Other Loss on sales
of REE
Spin-off costs Interest
expense
2016
$(13.2)
$50.0 $11.0
$5.0 $3.7
$5.4
$27.4
$11.1
$78.2
(20)
0
20
40
60
80
100
2015 France & Spain
and currency
translation
Tax
expense
Depr.
of REE
All Other Loss on sales of
REE
Spin-off costs Interest
expense
2016
Q4 Net Income Bridge
Full Year Net Income Bridge
111
1 1 1
NYSE: HRI
Q4 and Full Year Adjusted EBITDA1
30
$ in millions
Q4 Adjusted EBITDA Bridge 2
Full Year Adjusted EBITDA Bridge 2
Q4 Summary
Key markets mostly offset oil and gas decline
Full Year Summary
$536.2$18.4
$31.1 $9.7 $50.7
$45.5
$600.6
200
250
300
350
400
450
500
550
600
650
2015 France & Spain
and currency
translation
Loss on sales of
revenue earning
equipment
Stand-alone
costs
Key markets Oil and gas 2016
$145.7$2.3 $3.7 $6.1
$7.4
$1.4
$163.8
0
20
40
60
80
100
120
140
160
180
2015 France &
Spain and
currency
translation
Loss on sales of
revenue earning
equipment
Stand-alone costs Key markets Oil and gas 2016
Oil and gas impacted by YoY revenue
headwinds which continue to diminish as
comparable periods are lapped
1 For a reconciliation to the most comparable GAAP financial measure, see the
Appendix.
2 Corporate G&A costs allocated pro rata between “Key markets” and “Oil and gas”
NYSE: HRI
Fleet Capital Expenditures
31
Average fleet original equipment cost (OEC).
Net Fleet Capex for the full year 2016 was $352.9 million as we successfully disposed of low
performing fleet sooner than anticipated while achieving fleet diversification targets
In 2016, received $115.4 million in proceeds from disposal of equipment with an
approximate OEC of $313 million
Rental equipment at OEC 2 was $3.56 billion as of December 31, 2016
Average rental equipment at OEC2 for the full year ended December 31, 2016, grew 3.4%
versus the prior year, excluding divestitures
Dollar utilization was 35.1% for the fourth quarter 2016
$ in millions Year Ended December 31,
2016 2015 $ Variance
Total Revenue Earning Equipment Expenditures $ 468.3 $ 600.0 $ (131.7)
Revenue Earning Equipment Disposals $ (115.4) $ (151.9) $ 36.5
Net Fleet Capital Expenditures 1 $ 352.9 $ 448.1 $ (95.2)
1 Cash flow basis.
2 Based on ARA guidelines.
NYSE: HRI
Debt and Liquidity
32
Debt Ample Liquidity
$ in millions, as of 12/31/16
$910.0
$610.0 $625.0
'17 '18 '19 '20 '21 '22 '23 '24
Total Liquidity $ 828.7
Cash and Cash Equivalents 11.6
ABL Availability 817.1
Facility 1,750.0
Outstanding (910.0)
Letters of Credit (22.9)
ABL Credit
Facility
Senior Secured
Second Priority Notes
Capital
Leases
$70.3
Stable debt with long dated maturities provide financial flexibility
Total debt of $2.2 billion as of December 31, 2016
Maintained ample liquidity during the quarter - $828.7 million as of December 31, 2016
Net cash provided by operating activities was $433.4 million - strong free cash flow1 for FY 2016
of $35 million
Redeemed 10% of the outstanding senior notes at 103% of aggregate principal amount plus
interest under the terms of the indenture
1 For a reconciliation to the most comparable GAAP financial measure, see the Appendix.
NYSE: HRI
In Summary
• Gained traction in introducing new products across
branch network
• Accelerated branch performance in urban markets
• Improved operating efficiencies
• Improved sales force effectiveness through training
and productivity tools
• Achieved growth in ancillary revenues
• Continued to drive safety as our #1 priority throughout
the organization
33
NYSE: HRI
Appendix
34
NYSE: HRI
Glossary of Terms Commonly Used in the Industry
35
OEC: Original Equipment Cost which is an operating measure based on the guidelines of the American Rental
Association, which is calculated as the cost of the asset at the time it was first purchased plus additional capitalized
refurbishment costs (with the basis of refurbished assets reset at the refurbishment date).
1
Fleet Age: The OEC weighted age of the entire fleet.
2
Net Fleet Capital Expenditures: Capital expenditures of revenue earning equipment minus the proceeds from
disposal of revenue earning equipment.
3
Dollar Utilization ($ Ute): Dollar utilization is an operating measure calculated by dividing rental revenue by the
average OEC of the equipment fleet for the relevant time period.
4
Pricing: Change in pure pricing achieved in one period versus another period. This is applied both to year-over-year
and sequential comparisons. Rental rates are calculated based on the category class rate variance achieved either
year-over-year or sequentially for any fleet that qualifies for the fleet base and weighted by the prior year revenue mix.
5
FUR: Fleet unavailable for rent.
6
NYSE: HRI
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
36
EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be
considered in isolation or as a substitute for our reported results prepared in accordance with
GAAP. Further, since all companies do not use identical calculations, our definition and
presentation of these measures may not be comparable to similarly titled measures reported by
other companies.
EBITDA and Adjusted EBITDA - EBITDA represents the sum of net income (loss), provision for
income taxes, interest expense, net, depreciation of revenue earning equipment and non-rental
depreciation and amortization. Adjusted EBITDA represents EBITDA plus the sum of merger and
acquisition related costs, restructuring and restructuring related charges, spin-off costs, non-cash
stock based compensation charges, loss on extinguishment of debt, impairment charges, gain on
disposal of a business and certain other items. Management uses EBITDA and Adjusted EBITDA
to evaluate operating performance and period-over-period performance of our core business
without regard to potential distortions, and believes that investors will likewise find these non-
GAAP measures useful in evaluating the Company’s performance. These measures are
frequently used by security analysts, institutional investors and other interested parties in the
evaluation of companies in our industry. However, EBITDA and Adjusted EBITDA do not purport to
be alternatives to net earnings as an indicator of operating performance. Additionally, neither
measure purports to be an alternative to cash flows from operating activities as a measure of
liquidity, as they do not consider certain cash requirements such as interest payments and tax
payments.
NYSE: HRI
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
37
$ in millions Three months ended
December 31,
Year Ended December 31,
2016 2015 2016 2015
Net income (loss) $ (13.2) $ 78.2 $ (19.7) $ 111.3
Provision for income taxes 5.8 16.9 14.8 45.6
Interest expense, net 32.1 5.1 84.2 32.9
Depreciation of revenue earning equipment 95.4 86.1 350.5 343.7
Non-rental depreciation and amortization 11.9 19.1 44.8 77.2
EBITDA 132.0 205.4 474.6 610.7
Restructuring charges 0.5 0.8 4.0 4.3
Restructuring related charges 1 - 1.4 2.9 8.0
Spin-off costs 11.5 6.1 49.2 25.8
Non-cash stock-based compensation charges 1.7 0.4 5.5 2.7
Gain on disposal of business - (50.9) - (50.9)
Other - 0.6 - -
Adjusted EBITDA $ 145.7 $ 163.8 $ 536.2 $ 600.6
Total Revenues $ 405.2 $422.4 $ 1,554.8 $ 1,678.2
Adjusted EBITDA $ 145.7 $ 163.8 $ 536.2 $ 600.6
Adjusted EBITDA Margin 36.0% 38.8% 34.5% 35.8%
1 Represents incremental costs incurred directly supporting restructuring initiatives.
NYSE: HRI 38
Year Ended
December 31, 2016
Actual
Sale of France and
Spain
Foreign Currency
Translation
Year Ended
December 31, 2016
Adjusted
Total revenues $ 1,554.8 $ 0 $ 8.1 $1,562.9
Equipment rental revenue 1,352.7 0 6.6 1,359.3
Year Ended
December 31, 2015
Actual
Sale of France and
Spain
Foreign Currency
Translation
Year Ended
December 31, 2015
Adjusted
Total revenues $ 1,678.2 $ (69.8) $ 0 $1,608.4
Equipment rental revenue 1,411.7 (59.6) 0 1,352.1
$ in millions
Three months ended
December 31, 2016
Actual
Sale of France and
Spain
Foreign Currency
Translation
Three months ended
December 31, 2016
Adjusted
Total revenues $ 405.2 $ 0 $ 0.5 $ 405.7
Equipment rental revenue 356.7 0 0.5 357.2
Three months ended
December 31, 2015
Actual
Sale of France and
Spain
Foreign Currency
Translation
Three months ended
December 31, 2015
Adjusted
Total revenues $ 422.4 $ (9.9) $ 0 $412.5
Equipment rental revenue 359.2 (6.5) 0 352.7
$ in millions
$ in millions
$ in millions
$ in millions
Reconciliation to Adjust for Divestitures and Foreign Currency
Translation
NYSE: HRI
Reconciliation of Free Cash Flow
39
Free cash flow is not a recognized term under GAAP and should not be considered in isolation or
as a substitute for our reported results prepared in accordance with GAAP. Further, since all
companies do not use identical calculations, our definition and presentation of this measure may
not be comparable to similarly titled measures reported by other companies.
Free cash flow represents net cash provided by (used in) operating activities less revenue
earning equipment expenditures, proceeds from disposal of revenue earning equipment, property
and equipment expenditures, proceeds from disposal of property and equipment and other
investing activities. Free cash flow is used by management in analyzing the Company’s ability to
service and repay its debt and to forecast future periods. However, this measure does not
represent funds available for investment or other discretionary uses since it does not deduct cash
used to service debt or for other non-discretionary expenditures.
NYSE: HRI
Reconciliation of Free Cash Flow
40
$ in millions Year Ended
December 31,
2016
Net cash provided by operating activities $ 433.4
Revenue earning equipment expenditures ( (468.3)
Proceeds from disposal of revenue earning equipment 115.4
Non-rental capital expenditures (47.8)
Proceeds from disposal of property and equipment 5.7
Other investing activities (3.4)
Free Cash Flow $ 35.0
NYSE: HRI
Herc Rentals Corporate History & Key Events
19731968 2008 2010 20141965 2015
Introduced
industry-first
National
Accounts
program
Herc
Rentals
Founded
Rolled out
new
standardized
locations
1979
Entered
industrial
equipment
rental & leasing
markets
1989
New HERC
President
named
Launched
HertzEquip.
com
1997 1998
Expanded
into Canada
with
acquisition of
Certified
Rentals and
Acquired
2001 2003
Launched full-
scale general
rental program
and facilities
renovation
Energy
Services
Group
debuted
2004 2005
Hertz acquired by
Private Equity
Consortium
Crossed 300-
location milestone
in U.S. and
Canada
Launched
industry-first
online rental
account
management
Launched
Entertainment
Services
Entered China
Hertz IPO
New Hertz
CEO
named
2012
Acquired
New HERC
CEO named
in June
Hertz
announced
spin-off of
rental
equipment
business
Larry Silber
named HERC
CEO and began
building new
senior team and
organization
Sold operations in
France and Spain
Growth / Consolidation
2011
New HERC
President
named
Financial
Crisis
Strategic
Changes
Path Forward
Entered
France
and
Spain
Ford
acquired
Hertz
2006
Industry first
mobile-
friendly
website
Over 50 years of outstanding legacy – strong foundation for the next chapter
2000
• Acquired
• Acquired
Service
Pump and
Compressor
1992
• Acquired
New
HERC
President
named
41
Separation
from Hertz
Car Rental
2016
NYSE: HRI 42