HTZ Final Presentation

HERTZ GLOBAL HOLDINGS, INCPresentation By: Greenback Securities

Tim Do, Xiao Hu, Daniel Johnston, Shenhao Ju, Joseph Obrien, Saumya Shah

http://www.52photoshop.cn/pic26170.html

RecommendationTarget Price: $30.73

Total Return: 23%

BUYTarget Period: 12 months

Major Drivers1) Recovering economic condition

in U.S that foster Airline Industry

2) Key synergies3) Operating efficiencies4) Promising spin off of HERC

Jan-14 Apr-14 Jul-14 Oct-14 Jan-1519

21

23

25

27

29

31

Target Price:$ 30.73

Jan - 16

Market Profile

Closing Price (USD) on Feb 4, 2015

Closing Price Feb 4 - % Upside

Closing Price (USD) on Jan 3, 2015 25.02

52-Week Range 31.6-18.5

Share Outstandings(M) 447.7

Market Cap (M) 11,201

P/E 27

EV/EBITDA 5.85x

Source: Yahoo Finance, Thompson One, Team Estimates

Company Overview

Industry Overview

Financial Analysis Valuation Investment

Risks AppendixConclusion

Share Price

22% above mean consensus

Overview

81% of Revenue1,475 locations

1 % of Revenue72 locations

14.3% of Revenue

4 % of RevenueLocations

717 locations52,498 vehicles31.2% of Chinese Market Share

Joint Venture

Source: Company Info

Company Overview

Industry Overview



Key Synergies

Source: Bloomberg, Team estimates

160 M in 2013

300 M in 2014

Realized in Financial Statement

Will realize and generate in Revenue

Company Overview

Industry Overview



Investment gain $74 M now or $128M in 2015E VS $130M Initial investment1

Market shares gain by top player

2

3

Chinese total Market growth(CAGR)

29.1% from 2009- 201317.3% from 20014E- 2017

19% Equity Stake

Industry Overview

Industry OverviewUS On-Airport Market Share

2011 2012 2013 2014 2015 2016 201778%

79%

80%

81%

82%

83%

84%

85%

0

2

4

6

8

10

12

14

16

Load Factor World Load Factor US

Hertz; 37%

Avis; 26%

Enterprise, 34%

Others; 3%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Source: National Travel and Tourism Office

80% - Car Rental Revenue64% - Total Revenue6% Growth annuallyρ=0.9 (Very high correlated)Dollar Thrifty Synergy

Source: Car Rental Industry

Source: Bureau of Transportation, Team Estimate Source: FactSet, Team Estimate

2009 2010 2011 2012 2013 2014E 2015E $-

$20,000,000 $40,000,000 $60,000,000 $80,000,000

$100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Operating Rev Domestic PassengersGrowth

National Travel

Operating Revenue : US Carriers

Company Overview

Industry Overview



Load Factor

Competitive Positioning

HERC US REVENUE

World’s Construction Industry

• HERC – Spin off

• 2010-2013• 66%

increase in REVENUE

• 44% increase in EBITDA

500,000

1,000,000

1,500,000

85.0

90.0

95.0

100.0

105.0

110.0

115.0

120.0 US Construction Spending

Housing Under Construction

Con-struc-tion; 38%

Fragmented; 36%

Indus-trial; 26%

2011 2012 2013 2014 2015 20160

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

0

5

10

15

20

25

30

Sales Earnings Per Share

Source: Census.gov, Team Estimate, Annual Filings

Source: FactSet, Team Estimate

2013 2014 Growth

Construction 404000 457000 0.1305

Industrial 276000 315073 0.14

Fragmented 382680 399900 0.05

$50,000

$150,000

$250,000

$350,000

$450,000

Company Overview

Industry Overview



Source: Census.gov

Construction Spending

HERC US REVENUE

Key Financial Aspects

US & Risk Drives Increased Revenue

Both the car and equipment rental business have grown at a CAGR of 10.3% and 8.5% respectively since 2009

US auto rentals is core segment

Focus on their push towards “risk” or “non-program” vehicles

Risk/Reward at its finest 2013 2012 2011

A 0.91 0.95 0.83

B 0.76 0.79 0.75

A) % of non-program U.S. rentalsB) % of non-program Int'l rentals

Revenue Growth CAGR 2009A 2010A 2011A 2012A 2013A

Worldwide car rental 5,872.91 6,355.21 6,940.80 7,161.70 8,706.90 10.3%% Growth 8.21% 9.21% 3.18% 21.58%

Worldwide equipment rental

1,110.24 1,069.82 1,209.50 1,385.40 1,538.00 8.5%

% Growth -3.64% 13.06% 14.54% 11.01%All other operations 118.36 137.51 149.00 477.80 527.00 45.3%

16.18% 8.36% 220.67% 10.30%Total revenues 7,101.51 7,562.58 8,299.52 9,025.08 10,772.23

Company Overview

Industry Overview



Cash is King

A buy back of even half this amount would equate to a potentially $.04 increase in EPS from current levels at our price target of $30.73 all else being held constant.

Net Debt/EBITDA of 3.9x vs. 2.5x - 3.5x target. Increased CF will allow the company to pay down a portion of their $16bn in debt.

Mgmt. plan in place to return cash to shareholders of up to $1bn in share-buybacks

In Mn $ 2013A 2014P 2015P 2016P 2017P 2018PNet Debt $16,309 $16,309 $16,309 $16,309 $16,309 $16,309

EBITDA $4,151 $4,138 $4,460 $4,851 $5,283 $5,760

3.9x 3.9x 3.7x 3.4x 3.1x 2.8x

Value of share buyback

Price Ranges

In Mn $ 30.73

1,000 0.83

500 0.80

250 0.79

Company Overview

Industry Overview



http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.officialpsds.com/Gold-dollar-sign-PSD44631.html&ei=YUy5VNTiGcmTsQTt8IAI&bvm=bv.83829542,d.cWc&psig=AFQjCNGCbQbAdrL_YsH0Hvor8ZglcjbxYQ&ust=1421516236042010

Valuations

WACC 7.8%Terminal Free Cash Flow Growth Rate 3.6%PV of 2014-18 FCF $4,959 PV Terminal Value $24,009Enterprise Value $28,969Less Net Debt $15,209 # of Shares 447.7Equity Value $13,759

Price per share $30.73

Discounted Cash Flow Method

Source: Team Estimates

Free Cash Flow Buildup In Million USD 2014E 2015E 2016E 2017E 2018ETotal Revenues $11,539 $12,371 $13,270 $14,276 $15,359 EBITDA 4,235 4,546 4,883 5,253 5,299 EBIT 1,422 1,241 1,357 1,486 1,629 Tax rate 35% 35% 35% 35% 35% EBIAT $924.0 $806.6 $882.3 $966.0 $1,058.7 Depreciation & Amortization 2,813 3,016 3,235 3,480 3,745 Other Items 54.0 (14.8) (17.9) (19.8) (21.9)Capital expenditures (2,538.5) (2,721.7) (2,919.5) (3,140.6) (3,379.0)Unlevered free cash flows $1,252.6 $1,086.2 $1,180.2 $1,286.0 $1,402.4

Present value of free cash flows $1,162.4 $935.3 $943.1 $953.6 $965.0

Terminal Value 64%

36%PV 2018

Equity Value Break Up

Company Overview

Industry Overview



EV/EBITDA P/E

Ashtead Group 8.2x 21x

Caterpillar 7.0x 16X

United Rentals Inc 7.1x 17x

Avis Budget 6.9x 32x

Amerco 5.2x 15x

Sixt SE N.A 15xMean

6.8x 19xMedian

7x 16.5x

% estimat

ed change

in EBITDA

Multiple 6 6.8 7 7.5 8

-7.5% 22.30 28.33

29.84

33.60

37.37

-5.0% 23.53

29.71

31.26

35.13

39.00

-2.5% 24.75

31.10

32.69

36.66

40.63

0.0% 25.97

32.48

34.11

38.18

42.26

2.5% 27.19

33.87

35.54

39.71

43.88

5.0% 28.41

35.25

36.96

41.24

45.51

7.5% 29.63

36.64

38.39

42.76

47.14

Terminal Growth

Rate

WACC

7% 7.8% 8%

3% 34.85 23.71 20.95

3.6% 45.39 30.73 27.23

4% 54.76 36.66 32.46

A M&A analysis of the past deals in the industry provides a target price of $29.5

Multiples Support & Sensitivity AnalysisExit Multiple Method at 6.8 times

Enterprise Value $29,752.1

Less: Net debt 15,209.4

Equity Value $14,542.8

Diluted Shares Outstanding 447.7

Equity Value Per Share $32.48

Company Overview

Industry Overview



Investment Risk

The percentage of “program cars”

decreases

Residual Risk Air Travel Reductions

Car-Sharing Rentals Increase

The value of the non-program cars

declines

Competition with other car renting

company

Influence revenue severely

Cost related to the airline fluctuates 18 percent of

Americans have used the service

Captures parts of car rental market

shareDecreases airline traffic in key leisure

destinations

Company Overview

Industry Overview



Company Overview

Industry Overview



Conclusion

Major drivers1) Recovering economic condition

in U.S that foster Airline Industry2) Key synergies3) Operating efficiencies4) Promising spin off of HERC

Target $30.73

Thank you! & Q&A

Appendix• Income Statement• FCF• Valuation• WACC• Sensitivity Analysis• Deal Comps• China Care Rental Industry• China Auto Rental• Capital Gain• SWOT• Porter’s 5 Forces• Equipment Rental Catalog• Oil Production Cost• HERC Revenue• Peer Group

• HERC CONSTRUCTION US• HERC INDUSTRIAL• Equipment Rental Worldwide• HERC INTERNATIONAL OIL• Unemployment & Personal Co

nsumption• GDP• Fuel Cost in Airline Industry• Economic Analysis• US Travel Expenditure• Industry Analysis

Company Overview

Industry Overview



Income StatementIncome Statement Data

Projected Annual Forecast2011A 2012A 2013A 2014P 2015P 2016P 2017P 2018P

Revenue $8,299.3 $9,024.9 $10,771.9 $11,538.6 $12,371.4 $13,270.3 $14,275.5 $15,358.9 Revenue Growth Rate (%) 8.74% 19.36% 7.12% 7.22% 7.27% 7.57% 7.59%

EBITDA $3,043.2 $3,416.5 $4,050.9 $4,234.7 $4,546.5 $4,883.5 $5,253.4 $5,298.8 EBITDA Margin (%) 36.67% 37.86% 36.53% 36.7% 36.8% 36.8% 36.8% 34.5%

EBIT 1,075.5 1,175.5 1,400.6 $1,421.6 $1,240.9 $1,357.4 $1,486.2 $1,628.8 EBIT Margin (%) 12.96% 13.03% 13.00% 12.32% 10.03% 10.23% 10.41% 10.60%

Depreciation & Amortization $1,967.6 $2,241.0 $2,650.3 $2,813.1 $3,016.2 $3,235.3 $3,480.4 $3,744.5 D&A as a % of revenue 23.71% 24.83% 24.60% 24.38% 24.38% 24.38% 24.38% 24.38%

Company Overview

Industry Overview



Revenue Break Up

Company Overview

Industry Overview



2013 2014 2015 2016 2017 2018

US On Airport 4,965 5,372 5,815 6,298 6,845 7,448

Growth Rate % 8.2% 8.3% 8.3% 8.7% 8.8%

% of US Car Rental Revenue 78.5% 79.0% 79.6% 80.2% 80.7% 81.3%

US Off Airport 1,360 1,427 1,494 1,559 1,640 1,716

Growth Rate % 4.9% 4.7% 4.4% 5.2% 4.7%

% of US Car Rental Revenue 21.5% 21.0% 20.4% 19.8% 19.3% 18.7%

US Car Rental 6,324 6,799 7,309 7,857 8,485 9,164

Growth Rate % 7.5% 7.5% 7.5% 8.0% 8.0%

Worldwide Airport (Except US) 1,239 1,301 1,369 1,441 1,517 1,596

Worldwide Off Airport (Except US) 1,072 1,126 1,185 1,247 1,313 1,381

Worldwide Car Rental (Except US) 2,383 2,502 2,633 2,771 2,917 3,070

5% 5% 5% 5% 5%

Total Car Rental Revenue 8,707 9,300 9,942 10,628 11,402 12,234

HERC 1,539 1,669 1,815 1,979 2,157 2,351

8.5% 8.8% 9.0% 9.0% 9.0%

Other Operations 527 569 614 664 717 774

8.0% 8.0% 8.0% 8.0% 8.0%

TOTAL REVENUE 10,772 11,539 12,371 13,270 14,276 15,359

FCF Buildup

Free Cash Flow Buildup

$mm Projected Annual Forecast

2014A 2015A 2016A 2017A 2018A

Total Revenues $11,539 $12,371 $13,270 $14,276 $15,359

EBITDA $4,235 $4,546 $4,883 $5,253 $5,299

EBIT $1,422 $1,241 $1,357 $1,486 $1,629

Tax rate 35% 35% 35% 35% 35%

EBIAT $924 $807 $882 $966 $1,059

Depreciation & Amortization $2,813 $3,016 $3,235 $3,480 $3,745

Capital expenditures ($2,538) ($2,722) ($2,919) ($3,141) ($3,379)

Unlevered free cash flows $1,253 $1,086 $1,180 $1,286 $1,402

Company Overview

Industry Overview



Valuation: Perpetuity vs. Exit Multiple

Prepetuity Growth Method

Exit Multiple Method at 6.8 times

Enterprise Value $28,969.2 Enterprise

Value $29,752.16

Less: Net debt 15,209.4 Less: Net debt 15,209.4

Equity Value $13,759.8 Equity Value $14,542.8

Diluted Shares Outstanding 447.7 Diluted Shares Outstanding 447.7

Equity Value Per Share $30.73 Equity Value Per Share $32.48

Company Overview

Industry Overview



WACC

• Cost of Debt – 5.2%• Tax Rate - 35%• After-tax Cost of Debt – 3.38% • Cost of Equity – 14.15%– Risk Free Rate - 2.30%– Risk Premium - 7.2%– Beta - 1.65

WACC – 7.8%Company Overview

Industry Overview



Sensitivity Analysis – Exit MultipleMultiple

% change in EBITDA estimates

6 6.25 6.5 6.8 7 7.25 7.5 7.75 8

-7.5% 22.30 24.19 26.07 28.33 29.84 31.72 33.60 35.49 37.37

-5.0% 23.53 25.46 27.39 29.71 31.26 33.20 35.13 37.06 39.00

-2.5% 24.75 26.73 28.72 31.10 32.69 34.67 36.66 38.64 40.63

0.0% 25.97 28.00 30.04 32.48 34.11 36.15 38.18 40.22 42.26

2.5% 27.19 29.28 31.36 33.87 35.54 37.62 39.71 41.80 43.88

5.0% 28.41 30.55 32.69 35.25 36.96 39.10 41.24 43.38 45.51

7.5% 29.63 31.82 34.01 36.64 38.39 40.58 42.76 44.95 47.14

Company Overview

Industry Overview



Deal Comps for Car Rental Industry EV/Sales EV/EBITDA EV/IBD EV/NI P/E

RSC Holding Inc 3.30x 9.30x 2.10x (179.60x) (25.42x) Dollar Thrifty Automotive Group Inc 2.40x 5.50x 2.40x 19.60x 12.87x Avis Europe Plc 0.70x 8.80x 1.50x 43.60x 24.48x US Rentals 2.60x 5.90x 3.20x 15.00x 19.43x Bucyrus International Inc 2.80x 16.00x 5.70x 32.00x 27.96x Average 2.32x 9.10x 2.98x (13.88x) 11.86x Current Price 25.00

1 Day Premium

Acquirer Date Estimate Price Over(Under) Valued

58.72% United Rentals Inc 12/16/2011 45.00 80.00% 8.02% Hertz Global Holdings Inc 8/26/2012 12.88 -48.47%

59.90% Avis Budget Group Inc 6/14/2011 17.92 -28.34% NA United Rentals 6/16/1998 19.61 -21.56%

32.15% Caterpillar Inc 11/15/2010 52.22 108.88% 40% 29.53 40.63%

Company Overview

Industry Overview



Car rental industry deals (in million) EV/Sales EV/EBITDA EV/EBIT P/E Date

RSC Holding Inc 3.30x 9.30x 27.00x (25.42x) 12/16/2011 Dollar Thrifty 2.40x 5.50x 10.20x 12.87x 8/26/2012 Avis Europe Plc 0.70x 8.80x 10.20x 24.48x 6/14/2011 US Rentals 2.60x 5.90x 13.80x 19.43x 6/16/1998 Bucyrus International Inc 2.80x 16.00x 19.50x 27.96x 11/15/2010 Average 2.32x 9.10x 26.12x 17.80x

Each deal estimate price is calculated by using valuation multiplier, including EV/Sales, EV/EBITDA, EV/EBIT, and P/E ratio. By equally weighting all estimate price, we come up with final estimate valuation price $39.41, which is 57.65% greater than current stock price $25.00.

Company Overview

Industry Overview



China Car Rental Industry

Company Overview

Industry Overview



Total Market Growth1) Penetration rate is 0.4% compare to

global of 2.3%2) 2.5x license holders per vehicle in 2013

Chinese Car rental industry are still in early stage

Total Market Size

2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E0

10,000

20,000

30,000

40,000

50,000

60,000

China car rental and car service industry by revenue

in million CYN

Source: Frost & Sullivan

Market Shares

8.1%1.5%

1.2%

89.2%

Chinese Car Rental Industry

China Auto RentaleHiAvis ChinaOthers

China Auto Rental Company

Company Overview

Industry Overview



Source: Frost & Sullivan, Bloomberg

Largest car rental company in China

Drivers

1) Strong Market Leader in fragment car rental market

2) Highly growth market3) More vehicle demand due to license

restriction4) Strong brand and operating leverage

China Auto Rental

2015E P/E 22.2x

Current Price 11.7 HKD

Target Price 14 HKD

EPS for 2014-2016E 0.2-0.4-0.52

Revenue growth rate 32%

Capital Gain from CAR

Market Profile (Jan 29)

Closing Price (HKD) 11.7

52-Week Range 12.8-10.0

Share Outstanding (M) 2357.5

Market Cap (M) 27583

Dividend NA

00699.HK (CAR INC)

Price at IPO 8.5 8.5Current Price 11.7 14ECAR's Share Outstanding 2,357,500,000 2,357,500,000Capital Gain 7,544,000,000 12,966,250,000Share Holding 19% 19%USD/HKD 0.13 0.13Total Investment Gain 186,336,800 320,266,375

Source: Yahoo finance Team Estimates

Company Overview

Industry Overview



Investment $100 Million+30 million

SWOT Analysis• Strengths

– Hertz captures 25% market share of the car rental business, an impressive figure for a high-end brand.

– Hertz has developed a 24/7 unmanned service available via kiosks and online allowing customers to rent cars hassle-free. This technological advance is expected to increase their capacities for high volume and improve customer service, factors that will positively impact their non-airport market share.

– The Company has strong partnerships with numerous companies in different industries such as airlines, railways, hotels and travel

– This advance will also decrease costs and enable Hertz to offer more competitive prices– Hertz’s car sales business is shifting away from auction in favor of selling directly to

dealers and retail. The per-car benefit of this shift is about $500-1000. – Hertz has managed to decrease fleet depreciation substantially since 2006– Hertz’s equipment rental business is substantial, as they are the third largest

competitor.– Hertz has outstanding brand awareness.

Company Overview

Industry Overview



SWOT Analysis• Weaknesses

– Accounting issues has put Hertz behind in its financial reporting by two quarters as of October 2014. This will undoubtedly scare investors if they fail to address the issue in the coming months.

– Hertz’s on-airport facilities have reported being over-fleeted in 2013 due to lower-than-expected airline volumes.

– Hertz is second to Enterprise in the market share despite its impressive degree of brand awareness.

– Hertz’s business operations heavily funded by debt rather than equity which may hinder the company from borrow and repay money. The company has a debt/equity ratio of 5.89

• Threats– Their residuals are very sensitive; as a 1% change to residuals could result in a

pretax profit/loss of $83 million. – The amount and level of competition is increasingly aggressive.– Global travel is also sensitive to the threat of terrorism posed by ISIS.

Company Overview

Industry Overview



SWOT Analysis• Opportunities

– Hertz recently has invested in its insurance business, a major source of revenue for Enterprise, the current market leader.

– Hertz reaching out to grab the lower-end of the market by acquiring Dollar Thrifty. The move will deliver a revenue synergy of $300 million.

– Hertz has expended their brand extensively within the car rental business, by offering more diverse product lines than previously available.

– They have 10 registered and 16 pending patents, which represents opportunities for technological growth.

– With respect to the equipment rental industry, companies are gravitating towards renting rather than purchasing products.

– Anticipated spin-off of the equipment rental business demonstrates their high expectations in this realm.

– The economy’s impending rebound will improve their share price.– The growth of the Chinese market and IPO of China Car Rental.

Company Overview

Industry Overview



Porter’s Five ForcesTHREAT OF NEW

ENTRANTSPOWER OF SUPPLIERS

POWER OF BUYERS

THREAT OF SUBSTITUTES

RIVALRY

Low Low High Moderate HighHigh capital and investment costs

High number of suppliers in the industry

Low switching costs Various substitute services: Uber, ZipCar, Lyft, Yellow Cab,…

Numerous competitors

Innovative entry with unconventional services

Supplier’s products are important inputs but has low switching costs

High bargaining power due to low switching cost and variety of competitors

Threats of substitutes depends on the travel purpose and distance of customers

Strong price competition

Demand curve is very elastic and heavily based on pricing strategy

Low bargaining power

With internet, buyers are now able to compare price and make decision

Moderate industry growth (depend on the economy)

Economies of scale create advantage

High price sensitive and moderate experience sensitive

High exit barriers

Easy to imitate product differentiation

Customer loyalty varies upon type of customers

Company Overview

Industry Overview



Equipment Rental CatalogAerial

• Bucket Trucks

• Man lifts• Personal lifts• Platform lifts

Air

• Accessories• Compressors• Movers• Impact Tools

Earthmoving

• Backhoes• Hammers• Dozers• Excavators• Loaders• Road Graders• Tractors• Trenchers• Track

Machine

Concrete

• Buggies• Grinders• Stakes• Edger• Saws• Vibrators• Trowels

Compaction

• Plates• Rollers

Source: Company Data

Company Overview

Industry Overview



Equipment Rental CatalogElectrical

• Breakers• Drills• Generators• Grinders• Lightning• Sanders• Saws• Supplies• Traffic

directional• Vacuums

General

• Cutters• Chain Saws• Carts• Fans• Floor Care• Gators• Piping• Pressure

washers• Welders

Lawn Garden

• Brush Chipper

• Cutter• Hedge

Trimmer• Care• Post hole• Stayer• Tiller

Material

• Forklifts• Cranes• Dolly• Hoists• Industrial

forklifts• Pallet Lift

Pumping

• Centrifugal Pump

• Diaphragm • Hoses• Industrial

pump• Submersible

pump• Test pump• Trash pump• Well point

dewatering

Source: Company Data

Company Overview

Industry Overview



Oil Production Cost Lifting Costs Finding Costs Total Upstream

CostsUnited States – Average

$12.18 $21.58 $33.76

On-shore $12.73 $18.65 $31.38

Off-shore $10.09 $41.51 $51.60

All Other Countries –Average

$9.95 $15.13 $25.08

Canada $12.69 $12.07 $24.76

Africa $10.31 $35.01 $45.32 Middle East $9.89 $6.99 $16.88

Central & South America

$6.21 $20.43 $26.64

Source: Us Energy Information

Company Overview

Industry Overview



HERC REVENUE

69%

31%

HERC REVENUE

US

International

Construc-tion; 38%

Fragmented; 36%

Indus-trial; 26%

HERC REVENUE US

In Millions 2013 2014 Growth

HERC $1,539 $1,671 8.60%

US $1,063 $1,172 10.2%

International $476 $499 4.8%

Source: Company Data, Team Estimate

Company Overview

Industry Overview



HERC CONSTRUCTION US

Nov2014p

Oct2014r

Sep2014r

Aug2014

Jul2014

Nov2013

Oct2013p

Sep2013p+

Aug2013r

Jul2013r

Jun2013

Oct2012

Private New multi-family 47,523 46,995 46,604 44,602 43,644 37,349 34,459 33,705 32,314 30,672 31,597 25,006

Lodging 17,086 17,126 16,729 15,532 14,729 15,350 14,530 14,360 14,044 14,034 13,213 12,254 Office 38,848 39,674 39,483 37,344 36,133 33,059 30,634 30,264 30,717 30,423 28,572 30,341 Commercial 58,043 59,118 58,560 56,034 54,941 53,307 48,267 46,944 46,072 46,166 44,089 45,259

Amusement and recreation 7,997 8,339 7,973 7,229 7,309 7,968 6,265 6,411 6,809 6,411 5,892 6,085

Power 86,809 84,792 87,389 88,546 90,425 90,132 71,017 75,299 75,762 77,380 77,088 87,418

Manufacturing 58,989 58,908 57,891 56,029 53,474 48,711 48,688 48,082 50,516 49,655 43,343 47,142

Public Residential 5,344 5,165 5,516 5,219 5,459 5,652 6,021 5,754 6,445 6,323 6,150 6,080 Office 7,804 7,765 7,409 7,446 7,706 7,619 8,244 7,577 7,816 8,041 8,424 9,602 Commercial 2,038 2,151 1,896 2,015 1,617 2,093 2,194 2,120 2,178 2,533 2,375 3,074

Amusement and recreation 9,218 9,262 9,198 9,347 9,361 8,452 8,873 8,454 8,265 7,808 7,858 9,200

Power 10,976 12,738 11,016 12,150 12,098 12,912 13,619 12,614 12,404 12,762 12,715 12,295

Highway and street 85,665 85,382 83,520 84,009 83,516 81,214 83,295 82,821 83,633 81,388 81,511 76,272

Conservation and development 7,961 8,565 7,912 7,544 7,224 6,286 6,324 5,956 5,808 5,494 5,138 6,831

444,301 445,980 441,096 433,046 427,636 410,104 382,430 380,361 382,783 379,090 367,965 376,85913.1% 8.3% 16.6% 16.0% 13.1% 12.8% 11.5% 1.5%

Source: census gov, Team EstimateCompany Overview

Industry Overview



HERC INDUSTRIAL

In Millions Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

All Mining Quarter $51,645 $54,872 $57,746 $64,792 $69,566 $69,385 $67,768 $72,069 $75,915 $81,042 $77,919 $80,641 $85,006 $82,928 $89,355 $93,927 $96,999 $96,999

Growth QoQ 26.4% 16.8% 2.3%

2011 2012 2013 2014

All Mining Year $261,489 $296,794 $326,494 $377,280

Growth YoY 13.5% 10.0% 15.6%

Source: census gov, Team Estimate

Company Overview

Industry Overview



Hertz Equipment Rental Worldwide

2011 2012 20130

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

50

100

150

200

250

300

350

400

450

Construction Oil & Gas Production

Australia

2011 2012 201313,000

13,500

14,000

14,500

15,000

15,500

16,000

2,600.00

2,700.00

2,800.00

2,900.00

3,000.00

3,100.00

3,200.00

3,300.00

3,400.00


Canada

China

2011 2012 2013108,000110,000112,000114,000116,000118,000120,000122,000124,000

15

15.5

16

16.5

17

17.5

18


France

2011 2012 20130

50,000100,000150,000200,000250,000300,000350,000400,000450,000

4,000.004,020.004,040.004,060.004,080.004,100.004,120.004,140.004,160.004,180.00


Source: FactSet

Company Overview

Industry Overview



Hertz Equipment Rental Worldwide

2004 2005 2006 2007 2008 2009 2010 2011 2012 20137,000.00

7,500.00

8,000.00

8,500.00

9,000.00

9,500.00

10,000.00

Saudi Arabia

Saudi Arabia

2008 2009 2010 2011 2012 20130

20000

40000

60000

80000

Total World Linear (Total World)

Source: FactSet

Company Overview

Industry Overview



HERC INTERNATIONAL OIL

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Canada 2,398.40 2,368.90 2,525.40 2,628.10 2,579.30 2,579.50 2,740.80 2,900.60 3,137.80 3,325.10

6.3% 5.8% 8.2% 6.0%

China 3,485.30 3,608.60 3,672.70 3,728.80 3,790.20 3,796.00 4,078.40 4,058.70 4,085.10 4,164.10

7.4% -0.5% 0.7% 1.9%

France 23.3 21.3 21.5 19.8 19.5 18.2 18.1 17.8 16.3 16

Saudi Arabia 9,100.80 9,550.10 9,152.30 8,721.50 9,261.30 8,250.10 8,900.00 9,458.40 9,832.30 9,693.20

7.9% 6.3% 4.0% -1.4%

Netherlands 4.6 4.8 2.7 4.7 6.5 7.3 7.8 12.8 11 11.7

Saudi Arabia 9,100.80 9,550.10 9,152.30 8,721.50 9,261.30 8,250.10 8,900.00 9,458.40 9,832.30 9,693.20

4.9% -4.2% -4.7% 6.2% -10.9% 7.9% 6.3% 4.0% -1.4%

Source: FactSet

Company Overview

Industry Overview



HERC INTERNATIONAL CONSTRUCTION

Company Overview

Industry Overview



Construction (Mil $) AverageCanada 14,034 15,798 15,287 15,294 Growth 12.6% -3.2% 0.0% 3.1%China 340,300 387,764 419,815 506,672 Growth 13.9% 8.3% 20.7% 14.3%France 113,433 113,833 122,672 98,491 Growth 0.4% 7.8% -19.7% -3.9%Netherlands 34,371 39,920 47,459 41,631 Growth 16.1% 18.9% -12.3% 7.6%

Average Total 5.3%

Source: FactSet

Appendix-Unemployment & Personal Consumption

2000

-01-

01

2000

-09-

01

2001

-05-

01

2002

-01-

01

2002

-09-

01

2003

-05-

01

2004

-01-

01

2004

-09-

01

2005

-05-

01

2006

-01-

01

2006

-09-

01

2007

-05-

01

2008

-01-

01

2008

-09-

01

2009

-05-

01

2010

-01-

01

2010

-09-

01

2011

-05-

01

2012

-01-

01

2012

-09-

01

2013

-05-

01

2014

-01-

01

2014

-09-

010.0

2.0

4.0

6.0

8.0

10.0

12.0

Civilian Unemployment Rate

2007

-01-

01

2007

-06-

01

2007

-11-

01

2008

-04-

01

2008

-09-

01

2009

-02-

01

2009

-07-

01

2009

-12-

01

2010

-05-

01

2010

-10-

01

2011

-03-

01

2011

-08-

01

2012

-01-

01

2012

-06-

01

2012

-11-

01

2013

-04-

01

2013

-09-

01

2014

-02-

01

2014

-07-

018000.0

8500.0

9000.0

9500.0

10000.0

10500.0

11000.0

11500.0

12000.0

12500.0

U.S. Personal Consumption Expenditures

Source: US. Bureau of Labor Statistics

Company Overview

Industry Overview



Appendix-GDP Annual Growth Rate

Source: The World Bank, team estimate

2010 2011 2012 2013 2014e 2015eUnited States 2.5% 1.6% 2.3% 2.2% 2.3% 2.6%United Kingdom 1.9% 1.6% 0.7% 1.7% 2.5% 2.8%Germany 4.1% 3.6% 0.4% 0.1% 1.6% 1.1%France 2.0% 2.1% 0.3% 0.3% 0.4% 0.1%Italy 1.7% 0.6% -2.3% -1.9% -0.4% -0.1%Spain 0.0% -0.6% -2.1% -1.2% 1.3% 2.2%China 10.4% 9.3% 7.7% 7.7% 7.4% 7.2%Japan 4.7% -0.5% 1.8% 1.6% 0.1% -1.1%Australia 1.9% 3.1% 0.9% 0.2% 0.2% 0.1%South Korea 6.5% 3.7% 2.3% 3.0% 3.4% 3.3%

Company Overview

Industry Overview



Appendix-Fuel cost in Airline Industry in 2013

Source: Annual reports

Company name (in millions) Fuel cost Operating cost Percentage

JetBlue Airways Corporation (JBLU) 1,899 5,013 37.9%American Airlines Group Inc. (AAL) 7,839 25,344 30.9%Southwest Airlines Co. (LUV) 5,763 16,421 35.1%United Continental Holdings, Inc. (UAL) 12,345 37,030 33.3%Delta Air Lines, Inc. (DAL) 9,397 34,373 27.3%

Average 7,449 23,636 31.5%

Company Overview

Industry Overview



Appendix-US Citizen Monthly Traveling

Source: National Travel and Tourism Office

Jan-

12 Mar

May Ju

ly SepNov

Jan.-

13 Mar

May Ju

lSep

Nov

Jan.-

14 Mar

May Ju

lSep

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

US Citizen Monthly Traveling

Company Overview

Industry Overview



Economic Analysis

Crude oil price free falls

Traveling preference shifting

ρ=0.9

Source: SEC Filings, FactSet

31.5% of operation cost decrease in airline industry

Eventually Expansion & Price War

The monthly growth rate compared to last year was positive and increasing after May 2014

Hertz24%

Avis16%

Enterprise 53%

Others7%

US Fleet Size

Company Overview

Industry Overview



Recovery bring more Revenues

United States

United Kingdom

China Germany0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

20102011201220132014e2015e

civilian unemployment rate decreases from 10% in Oct, 2009 and reaches to five year low at 5.8% in Nov

Recovery Signal In US

Real personal consumption expenditures increased 3.2 percent in the third quarter, compared with an increase of 2.5 percent in the second.

US GDP growth rate in second quarter 3.9% and third quarter 5.0% of 2014 are beating previous estimates and market expectations

Source: World Banks & Team Estimate

Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Gasoline ROC -Crude Oil (petroleum) ROC -

Source: FactSet

Company Overview

Industry Overview



U.S. Travel Expenditure2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Travel Expenditures in U.S. ($ Billions) 772 699.8 747 813 855 894 940 985 1,033

US Residents 662 606 644 697 727 754 789 825 864

Internaional Visitors 110 94 104 116 129 141 151 160 170

2008 2009 2010 2011 2012 2013 2014 2015 2016 Total Domestic Person-Trips (Millions)

1,965

1,900

1,964

1,998

2,030

2,055

2,089

2,127

2,159

Business

461

434

446

447

449

452

456

462

465

Leisure

1,504

1,466

1,517

1,551

1,581

1,603

1,633

1,665

1,694

Average domestic spending vs visitors spending 85% vs 15%

Source: US Travel

Company Overview

Industry Overview



Operating Revenue Domestic Passengers (in 000s)

2011 2012 2013 2014 2015 2016 2017$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

024681012141618

Sales World Sales USEPS World EPS US

Source: FactSet, Bureau of Transportation

Company Overview

Industry Overview



Industry Analysis & Competitive Overview

Positive Outlook : • Car rental business is directly tied to the overall health of the economy• During recessions, consumers find alternative means of transportation• Recent dips in business may be explained by this trend• Positive economic outlook breeds optimism

Solid and Stable Performance:• Hertz has established itself as the benchmark for car rentals, outperforming other publicly traded industry competitors. • Lower cots should enable Hertz to manage price• Relatively low share price presents an opportunity for savvy investors• Key economic indicators support our buy recommendation

Hertz; 38.46%

Avis; 27.69%

Enterprise; 26.15%

Other; 13.85%

Great Brand Awareness

Excellent; 7

Satisfactory; 39

Poor; 2

Other; 10

Positive Feedback

Company Overview

Industry Overview



Peer Group

Company Overview

Industry Overview



Stock Enterprise Value Multiples Equity Value Multiples

Price NetEnterpris

e LTM CY14E CY015E LTM CY14E CY015E CY14E CY015E CY14E

Company 10/1/14 Debt ValueRevenu

eRevenu

eRevenu

e EBITDA EBITDA EBITDA P/E P/E P/E/G

1Ashtead Group

$1,646.00 $2,201.8 $9,567.9 3.46x 3.65x 3.18x 8.2x 8.7x 7.2x 19.0x 15.9x 0.04x

2 Caterpillar $97.61 $40,243.0 $61,980.4 1.12x 1.12x 1.07x 7.0x 7.4x 6.6x 15.5x 13.6x 0.85x 3 United Rentals Inc $104.43 $8,015.0 $16,835.5 3.22x 2.99x 2.72x 7.1x 6.2x 5.6x 16.2x 12.6x 0.08x 4 Avis Budget $53.28 $14,236.0 $18,899.7 2.28x 2.20x 2.09x 6.9x 21.3x 18.4x 18.0x 14.1x 0.00x 5 Amerco $259.78 $2,185.4 $4,933.4 1.71x 1.74x N.A 5.2x 5.2x N.A 14.8x 13.7x N.A6 Sixt SE $32.41 $2,050.3 $3,440.2 1.59x 1.54x 1.47x #DIV/0! 5.1x 4.7x 11.9x 10.6x 1.09x

High 3.46x 3.65x 3.18x 8.2x 21.3x 18.4x 19.0x 15.9x 0.85x Mean 2.23x 2.21x 2.11x 6.8x 9.0x 8.5x 15.9x 13.4x 0.33x

Median 1.99x 1.97x 2.09x 7.0x 6.8x 6.6x 15.8x 13.7x 0.08x Low 1.12x 1.12x 1.07x 5.2x 5.1x 4.7x 11.9x 10.6x 0.04x

Analyst Forecasts

Company Overview

Industry Overview



Analyst Forecast

Target

Mean 25.14

Median 25

High 32

Low 16

Std. Dev 5.67

Total 7

Source: Thompson One, Factset

Analyst Comparison

# of Brokers

Strong Buy 3

Buy 1

Hold 3

Underperform 1

Sell 0

Total 8

Source: Thompson One, Factset

2014E 2015E 2016E 2017E 2018E

TOTAL REVENUE 11,538.60 12,371.42 13,270.34 14,275.54 15,358.94

Mean Analyst Estimates 11,178 11,885 12,524 N.A N.A

3.23% 4.09% 5.96% N.A N.A

Forward P.E Analysis

2014P 2015P 2016P 2017P 2018P

Net Income 403.85 463.93 544.08 620.99 737.23

Shares 447.70 422.70 422.70 422.70 422.70

EPS 0.90 1.10 1.29 1.47 1.74

Price 21.59 21.59 21.59 21.59 21.59

PE 23.93x 19.67x 16.77x 14.70x 12.38x

Survey Result

Hertz; 38.46%

Avis; 27.69%

Enterprise; 26.15%

Other; 13.85%

Business Leisure Local Commute Other0.00%

20.00%

40.00%

60.00%

80.00%

Rental Car Purpose

Excellent12%

Satisfactory67%

Poor3%

Other17%

Hertz Customer SatisfactionBrand Awareness

Source: Team Survey

Documents

HTZ Final Presentation