© 2017 Herc Rentals Inc.
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Herc Holdings Inc.
Second Quarter Earnings Conference Call
for the period ending June 30, 2017
August 8, 2017
© 2017 Herc Rentals Inc.
Agenda
2NYSE: HRI
Welcome and Introductions Elizabeth Higashi
Vice President, Investor Relations
Strategic Update and Industry
Outlook
Larry Silber
President and Chief Executive Officer
Q2 and First Half Financial Review Barbara Brasier
Senior Vice President and Chief Financial Officer
Q&A
Larry Silber
Barbara Brasier
Bruce Dressel
Senior Vice President and Chief Operating Officer
© 2017 Herc Rentals Inc.
Safe Harbor Statements
3NYSE: HRI
Basis of Presentation
The financial information included in this presentation is based upon the condensed consolidated financial statements of the Company which are presented in
accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). These financial statements and financial information represent
only those operations, assets, liabilities and equity that form Herc Holdings Inc. on a stand-alone basis. Since the spin-off occurred on June 30, 2016, prior period
amounts represent carve-out financial results.
Forward-Looking Statements
This presentation contains statements, including those related to 2017 guidance, 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:
• 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 financial statements that would not be prevented or detected; we receive certain
transition services from Hertz Rental Car Holding Company, Inc. (“New Hertz”) pursuant to the transition services agreement covering information technology (“IT”)
services and other areas, which impact our control environment and, therefore, our internal control over financial reporting; 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 our material weaknesses and
Hertz Holdings' restatement 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 IT systems, including the migration of systems from New Hertz; 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;
© 2017 Herc Rentals Inc.
Safe Harbor Statements - Continued
4NYSE: HRI
• Risks related to the spin-off, which effected our separation from New Hertz, such as: 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 experience difficulties, delay and/or significant costs from a number of IT systems projects, including the migration of our financial system from the
New Hertz system to a stand-alone system and the movement of our point of sale system from the New Hertz system to our own, each of which will continue
to require significant investment of human and financial resources;
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;
© 2017 Herc Rentals Inc.
Safe Harbor Statements - Continued
5NYSE: HRI
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 IT 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 IT 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 and a lack of or delay in additional infrastructure
spending may have a material adverse effect on our share price; 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 our Annual Report on Form 10-K for the year ended December 31, 2016, under Item 1A "Risk Factors" 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.
© 2017 Herc Rentals Inc.
Information Regarding Non-GAAP Financial Measures
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.
6NYSE: HRI
© 2017 Herc Rentals Inc. 7NYSE: HRI
• Leveraging 50 years of knowledge and
experience with a new name and brand
• Driving initiatives to complete the separation
from Hertz efficiently and effectively
• Implementing the strategic decisions and
business investments needed to drive profitable
growth
• Accelerating rental revenue growth through fleet
and customer diversification
• Investing in fleet to improve mix and dollar
utilization
• Investing in facilities, sales and training
programs to enhance sales and operational
efficiencies
• Investing in technology to drive customer user
experience
Our First Anniversary as a Stand-alone Public Company
© 2017 Herc Rentals Inc.
Decisions that Support Our Strategic Direction
Disciplined
Capital
Management
IT
Infrastructure
North
American
Operations
8NYSE: HRI
Discontinued development of new
IT systems initiated prior to spin-
off; will build on our current
industry standard systems
Signed agreement to sell and lease
back 44 company-owned locations
Proceed with the separation
from our former parent
Expected to generate
approximately $120 million of
additional liquidity in the
second half of 2017
Strategy Decision Result
Decided to sell certain non-core
international equipment
Focus on North American
operations
© 2017 Herc Rentals Inc.
Financial Highlights – Q2 2017
9NYSE: HRI
1 Excluding impact of foreign currency translation. Key markets are defined as markets we currently serve outside of upstream oil and gas markets.
2 For a reconciliation to the most comparable GAAP financial measure, see the Appendix beginning on slide 29.
3 Herc Holdings does not provide forward-looking guidance for certain financial measures on a GAAP basis or a reconciliation of forward-looking non-GAAP
financial measures to the most directly comparable GAAP reported financial measures on a forward-looking basis because it is unable to predict certain items
contained in the GAAP measures without unreasonable efforts. Certain items that impact net income (loss) cannot be predicted with reasonable certainty,
such as restructuring and restructuring related charges, special tax items, borrowing levels (which affect interest expense), gains and losses from asset sales,
the ultimate outcome of pending litigation and spin-related costs.
4 For a calculation of net fleet capital expenditures, see the Appendix beginning on slide 29.
Equipment Rental Revenues
$350.8 million
+7.0% YoY
Equipment Rental Revenues
Growth in Key Markets1
+ 8.9% YoY
85% of total
Pricing
+ 1.5% YoY in Key Markets
+1.4% YoY Overall
Net Loss ($27.6) million
Adjusted EBITDA2
$133.1 million
32.0% margin
Affirmed 2017 Guidance3
Adjusted EBITDA: $550 to $590 million
Net Fleet CapEx4 : $275 to $325 million
© 2017 Herc Rentals Inc.
Committed to Our Strategic Direction
Disciplined
Capital
Management
Expand and
Diversify
Revenues
Improve
Operating
Effectiveness
Enhance
Customer
Experience
On the Path Forward
• Broaden
customer base
• Expand
products and
services
• Increase
density
• Grow ancillary
revenues
• Focus on safety
and labor
productivity
• Improve vendor
management
and fleet
availability
• Drive operating
performance
through mix and
volume
• Provide
premium
products and
services
• Introduce
innovative
technology
solutions
• Drive EBITDA
margin growth
• Emphasize
fleet
management
• Improve key
financial
metrics
10NYSE: HRI
© 2017 Herc Rentals Inc.
Expand and Diversify Revenues: Strong Q2 Revenue Growth
• Overall rental revenue growth accelerated in
the second quarter and oil and gas markets
appear to be stabilizing
• Achieved above market growth
• Strong performance from the coastal
regions and major markets
• Pricing was strong in key markets, particularly
in the U.S. in both national and local accounts
• Local rental revenues grew faster than
national account revenues in the quarter
• ProSolutions and ProContractor delivered
strong year-over-year rental growth
• Ancillary revenue increased 12.2% in the
quarter over the prior-year period
11NYSE: HRI
1 Excludes the impact of foreign currency
Year-Over-Year Price Change by Quarter
Year-Over-Year Rental Revenue Growth 1
8.1%
7.2%
6.2%
8.5%
8.9%
0.1%
1.4% 1.3%
3.8%
7.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
Key Markets Overall
1.7%
1.8%
1.5%
1.7%
1.5%
0.5% 0.5% 0.5%
1.1%
1.4%
0.0%
0.5%
1.0%
1.5%
2.0%
Q2-16 Q3-16 Q4-16 Q1-17 Q2-17
Key Markets Overall
© 2017 Herc Rentals Inc.
Expand and Diversify Revenues: Improving Fleet Mix
12NYSE: HRI
Aerial - Booms
18.9%
Aerial -
Scissors &
Other
7.2%
Earthmoving -
Heavy
9.3%
Earthmoving -
Compact
7.6%Material Handling-
Telehandlers
13.4%
Material
Handling -
Industrial
3.3%
Trucks and
Trailers
12.4%
ProSolutions
13.5%
ProContractor
6.3%
Air Compressors
2.8%
Other
1.9%
Lighting
1.7%
Compaction
1.7%
OEC as of June 30, 2017 1
• Continued to aggressively manage fleet
through purchases of new equipment
categories to broaden customer base
and improve $ utilization
• Since year end 2015, ProContractor and
ProSolutions equipment combined,
increased from 16% to nearly 20% of
total OEC
• Continued shift towards higher $
utilization equipment categories including
aerial scissor lifts, industrial material
handling and compact earth moving
1 Original equipment cost based on ARA guidelines.
© 2017 Herc Rentals Inc.
Improve Operating Effectiveness: Improving Profitability
• Rental revenue growth of 7.0% exceeded
growth in average OEC fleet of 4.7%
reflecting improved volume, mix and pricing
• $ Utilization of 34.0% for the second
quarter improved 50 basis points versus
the prior year, the first year-over-year
increase since the downturn in oil and gas
markets
• Focusing on vertical market sales
strategies to drive customer and industry
diversification
• Improving branch efficiencies through
further training in standard operating
procedures
• Continuing to reduce FUR: 13.1% in June
2017 compared to 13.3% in June 2016,
reflecting better turnaround of equipment
13NYSE: HRI
© 2017 Herc Rentals Inc.
Improve Operating Effectiveness: Focus on Safety
• We highlighted our safety programs throughout
June’s National Safety Month with special
programs for our team members
• Safety performance remains a major focus and
the YTD total recordable incident rate (TRIR)
declined 9% versus the same period in 2016
• Our ultimate goal is for zero incidents and safety
performance remains our number one priority
14NYSE: HRI
• Training in sales, branch operations, systems and safety
continues to be an important investment for new and seasoned
personnel
© 2017 Herc Rentals Inc.
Enhance Customer Experience: Q2 2017 Highlights
• Introducing a new ProContractor campaign
focused on implementation of OSHA
requirements for controlling silica dust
• Growing ProSolutions through
customized solutions across a broad
array of diverse industries
• Developing new customized catalogs for
targeted markets
• Introducing our broad range of products
and solutions to customers through our
Ready! location events and other branch
activities
15NYSE: HRI
© 2017 Herc Rentals Inc.
Enhance Customer Experience: Investing in Technology
• Continuing to build out technology
applications that help our customers
work more efficiently, effectively and
safely:
• ProControl telematics applications are
helping customer track performance,
utilization and service
• Herc on the Go will track the delivery of
equipment
• E-Apply is helping customers open new
accounts faster and more efficiently
• Optimus provides “real-time” price
quotations to our customers
• Mobile apps are supporting our
commitment to our customers’ efficiency
and effectiveness
NYSE: HRI 16
© 2017 Herc Rentals Inc.
$299.2
$307.9
2016 2017E
Strong Industry Outlook Supports Our Growth Proposition
Positive market growth and further penetration of rental solutions expected to continue
1 The American Institute of Architects (AIA).
2 ARA / IHS Global Insight as of July 2017, excludes Party & Event data.
3 Dodge Analytics.
4 Industrial information resources.
($ in billions)
as of July 2017
N.A. Equipment Rental Market 2
Non-Residential Starts 3
Architecture Billings Index 1
Industrial Spending 4
$235
$249
$272
$281
$
2016 2017E 2018E 2019E
($ in billions)
a$3s5 0 of April 2017
17NYSE: HRI
($ in billions)
as of July 2017
• Key industry metrics
remain positive – non-
residential construction
growth of 4.6% projected
through 2019
• American Rental
Association (ARA)
forecasts North
American equipment
rental growth of 4.5%
through 2021
• Industrial spending is
expected to grow 2.9%
in 2017
• Continuing shift from
ownership to rental will
fuel growth
$38
$31 $32
$35
$38
$41
$44
$47 $49
$51 $54
$57 $59
$61
08 09 10 11 12 13 14 15 16 17E 18E 19E 20E 21E
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
Jun
54.2
as of June 2017
© 2017 Herc Rentals Inc.
Transformation in Process
• 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
national accounts
• Broadening Herc Rentals Operating Model to
improve branch efficiency
• Reducing equipment, parts and service costs
through better vendor management
• Enhancing customer service through key
initiatives such as premium brands and new
technologies
18NYSE: HRI
© 2017 Herc Rentals Inc.
Financial Overview
© 2017 Herc Rentals Inc.
Q2 and First Half Financial Summary
20NYSE: HRI
1 For a reconciliation to the most comparable GAAP financial measure, see the Appendix beginning on slide 29.
$ in millions, except EPS
Three Months Ended
June 30,
Six Months Ended
June 30,
2017 2016 2017 2016
Equipment Rental Revenues $ 350.8 $ 327.9 $ 671.4 $ 635.7
Total Revenues 415.8 380.4 805.2 746.0
Net Loss (27.6) (8.0) (66.8) (9.5)
Diluted Loss Per Share (0.98) (0.28) (2.36) (0.34)
Adjusted EBITDA1 $ 133.1 $ 130.6 $ 230.9 $ 238.4
© 2017 Herc Rentals Inc.
$ 671.4
$0.9
$9.3
$45.9
$635.7
2016 Currency
translation
Key markets Oil and gas 2017
Q2 and First Half Equipment Rental Revenues
$ in millions
• Overall equipment rental revenues increased
7.0% in the second quarter, and 5.6% for the
first half, achieving above market growth
• Upstream oil and gas markets appear to be
stabilizing after two and a half years of year-
over-year declines
• Equipment rental revenue increased
+8.9% in key markets in the second
quarter, excluding currency
• Key markets increase attributable to:
– Traction of urban market strategy
– Strong growth in the coastal regions and
major markets
– ProSolutions and ProContractor
growth year-over- year
• Key markets represented 85% of rental
revenue
• Q2 pricing increased 1.5% YoY in key
markets and 1.4% overall
Q2 Equipment Rental Revenue Bridge Q2 and First Half Summary
21NYSE: HRI
$ 350.8
$1.9
$24.5 $0.3
$327.9
200
220
240
260
280
300
320
340
360
2016 Currency
translation
Key markets Oil and gas 2017
First Half Equipment Rental Revenue Bridge
© 2017 Herc Rentals Inc.
• Total revenues increased 9% for the
second quarter year-over-year, and 8%
for the first half
• Sales of revenue earning equipment
increased almost 50% in the second
quarter versus the prior-year period
• Continued aggressive fleet
management to achieve our strategic
goals
• New equipment sales continue to be
lower year-over-year due to the focus
on higher-margin rental activities
Q2 and First Half Total Revenues
22NYSE: HRI
$415.8
$2.1
$2.1$24.8
$380.4
$14.8
300
320
340
360
380
400
420
440
2016 Currency
translation
Equipment rental
revenue
Sales of revenue
earning equipment
Sales of new
equipment and
other
2017
Q2 Total Revenue Bridge
$ in millions
First Half Total Revenue Bridge
$805.2
$0.9
$8.1
$36.6
$746.0
$31.6
675
695
715
735
755
775
795
815
835
2016 Currency
translation
Equipment rental
revenue
Sales of revenue
earning equipment
Sales of new
equipment and
other
2017
Q2 and First Half Summary
© 2017 Herc Rentals Inc.
$(66.8)
$0.1
$49.6
$29.3
$21.4
$9.7
$42.6
$10.2
($9.5)
(80)
(60)
(40)
(20)
0
20
40
60
2016 Currency
Translation
Income tax
benefit
Spin-off
costs
Impairment Interest
Expense
Depreciation
of REE
All Other 2017
$(27.6)
$0.1
$29.3
$18.3
$10.6
$2.4
$27.5
$8.6
($8.0)
(40)
(30)
(20)
(10)
0
10
20
30
40
2016 Currency
Translation
Income tax
benefit
Spin-off
costs
Impairment Interest
Expense
Depreciation
of REE
All Other 2017
$ in millions
• Impairment charges were $29 million in the
quarter, consisting primarily of a write-off
related to discontinued development of
new information technology systems
• Interest expense reflects debt on a stand-
alone basis and includes $6 million related
to the cost of the redemption of 10% of the
senior notes in the first quarter offset by
interest savings in the second quarter
• Fleet depreciation increased due to fleet
growth and carryover effect of ordinary
course rate adjustments made in 2016
• Spin-off costs were reduced $9 million in
the quarter and $10 million in the first half
Q2 and First Half Net Loss
Q2 Net Loss Bridge
23NYSE: HRI
1 Excludes the impact of currency translation.
First Half Net Loss Bridge
Q2 and First Half Summary
1
1
1
1
1
1
© 2017 Herc Rentals Inc.
0
20
40
60
100
140
$ in millions
Q2 Adjusted EBITDA Bridge
Q2 and First Half Adjusted EBITDA1
• Strong equipment rental revenue growth
was offset by operational and sales
investments to promote future growth
• The improvement in the results of the
sales of revenue earning equipment
added to adjusted EBITDA
• Stand-alone public company costs
increased ~$6 million in the quarter and
~$11 million in the first half compared to
prior year periods
• Stand-alone public company costs were
previously considered spin-off costs in the
first half of 2016 because we were a
division of Hertz
1 For a reconciliation to the most comparable GAAP financial measure, see the Appendix
beginning on slide 29.
2 Q1 items includes first quarter expenses related to business transformation, year-end
reporting, and charges related to the bankruptcy filing of a large customer.
24NYSE: HRI
140
First Half Adjusted EBITDA Bridge
Q2 and First Half Summary
2
$133.1
$0.6
$11.7 $5.5 $3.9 $2.7
$24.8 $2.1
$130.6
0
20
40
60
80
100
120
140
160
180
2016 Currency
translation
Equipment
Rental
Revenue
Loss on sales
of revenue
earning
equipment
Direct
operating
expenses
Stand-alone
public
company
costs
Sales
costs
All Other 2017
$230.9
$0.4
$20.3 $11.0
$10.5 $6.3 $5.0
$36.6 $9.4
$238.4
0
50
100
150
200
250
300
2016 Currency
translation
Equipment
Rental
Revenue
Loss on
sales of
revenue
earning
equipment
Direct
operating
expenses
Stand-alone
public
company
costs
Q1 items Sales
costs
All Other 2017
© 2017 Herc Rentals Inc.NYSE: HRI 25
1 Original equipment cost based on ARA guidelines.
Fleet at Original Equipment Cost1
• Average fleet at OEC1 for the period ended June 30, 2017
• Increased 4.7% in Q2 2017 versus the prior-year period
• Increased 5.0% in the first half 2017 versus the prior-year period
• Dollar utilization was 34.0% for the second quarter 2017, up 50 bps from the prior year period
$ in millions
Q1 2017 Q2 2017 First Half 2017
Beginning Balance – Fleet at OEC $3,556 $3,556 $3,556
Expenditures – Fleet at OEC $119 $217 $ 336
Disposals – Fleet at OEC ($120) ($111) ($231)
Foreign Currency / Other $1 ($9) ($8)
Ending Balance – Fleet at OEC $ 3,556 $ 3,653 $ 3,653
© 2017 Herc Rentals Inc.NYSE: HRI 26
Debt and Liquidity
Debt Liquidity
$ in millions, as of 06/30/17
• Stable debt totaling $2.2 billion as of June 30, 2017 provides financial flexibility
• Maintained ample liquidity during the quarter with $733 million as of June 30, 2017
• Net cash from operating activities totaled $123 million with free cash flow1 for the first six months of
$23 million, which was positively impacted by changes in working capital
• Signed agreement to sell and lease back 44 locations - expected to generate ~$120 million of
additional liquidity
1 For a reconciliation to the most comparable GAAP financial measure, see the Appendix beginning on slide 29.
ABL Facility
Outstanding
Letters of Credit
1,750.0
(1,005.0)
(24.5)
Availability from ABL
Cash and Cash Equivalents
720.5
12.0
Total Liquidity $ 732.5
$1,005.0
$549.0 $562.5
'17 '18 '19 '20 '21 '22 '23 '24
ABL Credit
Facility
Senior Secured
Second Priority Notes
Capital Leases and
Other borrowings
$62.6
© 2017 Herc Rentals Inc.
2017 Full Year Guidance1
NYSE: HRI 27
Trajectory of year-over-year rental
revenue growth heading into seasonal
peak
Stabilization of upstream oil and gas
markets
Improved volume, mix and pricing
Growing rental revenue faster than fleet
Continuing focus on controlling costs
Realizing the benefits of investments
made in people, processes, and
facilities
Expected Drivers for Second Half
Adjusted EBITDA
Adjusted EBITDA:
$550 to $590 million
Net Fleet CapEx:
$275 to $325 million
1 Herc Holdings does not provide forward-looking guidance for certain financial measures on a GAAP basis or a reconciliation of forward-looking non-GAAP financial measures to the most directly
comparable GAAP reported financial measures on a forward-looking basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. Certain items that
impact net income (loss) cannot be predicted with reasonable certainty, such as restructuring and restructuring related charges, special tax items, borrowing levels (which affect interest expense), gains and
losses from asset sales, the ultimate outcome of pending litigation and spin-related costs.
© 2017 Herc Rentals Inc.NYSE: HRI 28
We have achieved
strong above
market
top-line growth
We have made
important strategic
decisions that
position us for the
future
We continued to
invest in people,
processes, and
facilities to improve
profitability in the
long term
We are affirming
our 2017 guidance
We remain confident in our strategy
Q2 Key Takeaways
© 2017 Herc Rentals Inc.
NYSE: HRI29
Appendix
29
© 2017 Herc Rentals Inc. 30NYSE: HRI
1 OEC: Original Equipment Cost which is an operating measure based on the guidelines of the American Rental
Association, which is calculated as the cost of the asset at the time it was first purchased plus additional capitalized
refurbishment costs (with the basis of refurbished assets reset at the refurbishment date).
2
Fleet Age: The OEC weighted age of the entire fleet.
Net Fleet Capital Expenditures: Capital expenditures of revenue earning equipment minus the proceeds from
disposal of revenue earning equipment.
3
Dollar Utilization ($ 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
Glossary of Terms Commonly Used in the Industry
© 2017 Herc Rentals Inc. 31NYSE: HRI
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
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 (which is included in interest
expense, net), 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.
© 2017 Herc Rentals Inc.
$ in millions Three Months Ended
June 30,
Six Months Ended June 30,
2017 2016 2017 2016
Net loss $ (27.6) $ (8.0) $ (66.8) $ (9.5)
Provision for income taxes (22.2) 5.3 (37.3) 5.3
Interest expense, net 31.6 13.3 69.4 19.8
Depreciation of revenue earning equipment 94.3 84.2 187.2 166.0
Non-rental depreciation and amortization 12.6 10.6 24.3 21.1
EBITDA 88.7 105.4 176.8 202.7
Restructuring charges 0.4 3.1 1.0 3.4
Restructuring related charges 1.8 2.7 1.8 2.7
Spin-off costs 9.1 17.7 16.7 26.9
Non-cash stock-based compensation charges 3.0 1.7 4.5 2.7
Impairment 29.3 - 29.3 -
Other 0.8 - 0.8 -
Adjusted EBITDA $ 133.1 $ 130.6 $ 230.9 $ 238.4
Total Revenues $ 415.8 $ 380.4 $ 805.2 $ 746.0
Adjusted EBITDA $ 133.1 $ 130.6 $ 230.9 $ 238.4
Adjusted EBITDA Margin 32.0% 34.3% 28.7% 32.0%
32NYSE: HRI
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
© 2017 Herc Rentals Inc. 33NYSE: HRI
Reconciliation of Free Cash Flow
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.
© 2017 Herc Rentals Inc. 34NYSE: HRI
Reconciliation of Free Cash Flow
$ in millions Six Months Ended June 30,
2017 2016
Net cash provided by operating activities $ 122.6 $ 208.1
Revenue earning equipment expenditures (160.8) (142.5)
Proceeds from disposal of revenue earning equipment 88.6 74.2
Net Fleet Capital Expenditures (72.2) (68.3)
Non-rental capital expenditures (26.0) (13.4)
Proceeds from disposal of property and equipment 1.7 2.8
Other investing activities (3.3) 5.6
Free Cash Flow $ 22.8 $134.8
© 2017 Herc Rentals Inc.NYSE: HRI 35
1 Original equipment cost based on ARA guidelines.
Historic Fleet at Original Equipment Cost1
$ in millions
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Full Year
2016
Q1 2017 Q2 2017 First Half
2017
Beginning Balance – Fleet at
OEC
$3,384 $3,391 $3,537 $3,616 $3,384 $3,556 $3,556 $3,556
Expenditures – Fleet at OEC $90 $220 $142 $43 $495 $119 $217 $ 336
Disposals – Fleet at OEC ($96) ($85) ($57) ($90) ($328) ($120) ($111) ($231)
Foreign Currency / Other $13 $11 ($6) ($13) $5 $1 ($9) ($8)
Ending Balance – Fleet at OEC $3,391 $3,537 $3,616 $3,556 $3,556 $ 3,556 $ 3,653 $ 3,653
© 2017 Herc Rentals Inc.
Expand and Diversify Revenues: Driving $ Utilization
36NYSE: HRI
Aerial - Booms
19.8%
Aerial -
Scissors &
Other
6.2%
Earthmoving -
Heavy
11.7%
Earthmoving -
Compact
7.2%
Material Handling-
Telehandlers
13.5%
Material
Handling -
Industrial
3.2%
Trucks and
Trailers
13.0%
ProSolutions
12.6%
ProContractor
4.3%
Air Compressors
3.1%
Other
2.0%
Lighting
1.7% Compaction
1.7%
Aerial - Booms
18.9%
Aerial -
Scissors &
Other
7.2%
Earthmoving -
Heavy
9.3%
Earthmoving -
Compact
7.6%Material Handling-
Telehandlers
13.4%
Material
Handling -
Industrial
3.3%
Trucks and
Trailers
12.4%
ProSolutions
13.5%
ProContractor
6.3%
Air Compressors
2.8%
Other
1.9%
Lighting
1.7% Compaction
1.7%
OEC as of 06/30/2016 1 OEC as of 06/30/2017 1
Increased
• Aerial – Scissor Lifts
• Material Handling - Industrial
• ProContractorTM and ProSolutionsTM
Reduced
• Aerial – Booms
• Earthmoving - Heavy
• Material Handling - Telehandlers
1 Original equipment cost based on ARA guidelines.
© 2017 Herc Rentals Inc. 37NYSE: HRI