Hertz Investor Presentation Fireside Chat September 26, 2013 MKM - - PowerPoint PPT Presentation

Hertz Investor Presentation Fireside Chat

September 26, 2013 MKM Entertainment & Leisure Conference New York City

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Forward-Looking Statements

Certain statements contained in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements give our current expectations or forecasts of future events and our future performance and do not relate directly to historical or current events or our historical or current performance. Most of these statements contain words that identify them as forward looking, such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “seek”, “will”, “may”, “opportunity”, “target” or other words that relate to future events, as opposed to past or current events. Forward-looking statements are based on the then-current expectations, forecasts and assumptions of our management and involve risks and uncertainties, some of which are outside of our control, that could cause actual outcomes and results to differ materially from current expectations. For some of the factors that could cause such differences, please see the sections of our annual report on Form 10-K for the year ended December 31, 2012 and quarterly reports on Form 10-Q for the first and second quarters of 2013 entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Copies of these reports are available from the Securities and Exchange Commission, our website or our Investor Relations department. We cannot assure you that the assumptions under any of the forward-looking statements will prove accurate or that any projections will be realized. We expect that there will be differences between projected and actual

• results. These forward-looking statements speak only as of the date of this presentation, and we do not

undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We caution prospective purchasers not to place undue reliance on forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements contained herein and in our annual and quarterly reports described above.

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Disclosure on Financials in Presentation

Amounts shown in this presentation, unless otherwise indicated, are for Hertz Global Holdings, Inc., (HGH), the ultimate parent company of The Hertz Corporation (THC). GAAP and non-GAAP profitability metrics for THC, the wholly owned operating subsidiary, are different from those of HGH. During 2006, the results of HGH and THC varied primarily due to the $1.0 billion loan facility on the books of HGH which was repaid with the proceeds from HGH’s initial public offering. In 2007, THC had lower total expenses than HGH primarily due to $2.0 million of secondary offering costs incurred at the HGH level. In 2009, 2010, 2011, 2012, and six months ended June 30, 2013 HGH also had interest expense relating to the 5.25% Convertible Senior Notes issued in May and June 2009. Other minor differences in the various profit metrics for HGH and THC, presented on both a GAAP and non-GAAP basis, exist relating to additional audit fees and interest income relating to additional cash on had at the HGH level.

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1H:13 OPERATING PERFORMANCE

Rental Car Off Airport Equipment Rental Rental Car Leisure Segment

Insurance Replacement Technology Non-res Construction Recovery Tuck-in Acquisitions

Vehicle Leasing

Revenue +17% Revenue* +double-digit% Revenue +16% Revenue +12%

*Adj for location divestitures

1H:13 Adjusted Pre-tax +74% YoY

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September 2013 Guidance

Share count FY:13 = 465 mil

% YoY

High end of forecast

February 2013 Guidance

Share count FY:13 = 455 mil

Revenue $10.80 to $10.90 bil +21% $10.85 to $10.95 bil Corporate EBITDA $2.12 to $2.19 bil +34% $2.21 to $2.27 bil

• Adj. Pre-Tax Income

$1.20 to $1.27 bil +41% $1.27 to $1.34 bil

• Adj. Net Income

$780 to $830 mil +40% $830 to $875 mil Adjusted Diluted EPS $1.68 to $1.78 +34% $1.82 to $1.92 Free Cash Flow UNCHANGED $500 to $600 mil

∆ Drivers: U.S. RAC VOLUME/UTILIZATION & WW RAC DEPRECIATION

FY:13 REVISED GUIDANCE

Cost savings target of $300M to offset inflation (incl. depreciation savings) Higher tax rate of 35% Cash interest expense ~$100 higher YoY

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U.S. RAC VOLUME UPDATE

HERTZ BRAND U.S. AIRPORT VOLUME REMAINS SOFT

SEQUESTER -- 94 industries, accounting for about $6T in revenue, are vulnerable to government cutbacks – usnews.com CONSUMER – U.S. retail sales rose less than forecast; consumer confidence fell to five-month low, signaling economic weakness “Consumers investing in homes, spend less on

• ther things.”

“Consumers struggle in slow recovery due to higher payroll taxes, expensive gasoline, and slow job market.” – Bloomberg

Hertz Brand U.S. RAC Airport Transaction Days Q1 YoY Q2 YoY 1H YoY 2013 (0.5%) 0.9% 0.2% 2012 6.1% 3.3% 4.6%

AIRLINES – Last 12 mos. cut 13M seats…

there is little or no capacity growth in the forecast – TIME “August air transactions, processed by mega travel agencies, down 3.5% YoY. Online agencies experienced 6.7% drop in August air transactions.” – Business Travel News

HOTELS – “Worldwide hotel bookings through

global distribution channels in August declined 1.5% YoY.” Business Travel News

WW RAC FY:13 volume estimate now +19% YoY Forecast revision driven by lower Hertz U.S. airport volume

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U.S. RAC FLEET EFFICIENCY UPDATE

• Fleet levels aligned to expected higher base volume
• 1H:13 fleet efficiency down ~40 bps YoY
• Lower than expected demand in Q3:13 results in excess vehicles
• Accelerated Firefly brand introduction in U.S. to absorb some of

the surplus

• Began de-fleeting early

FY:13E U.S. RAC Fleet Efficiency Down vs. Internal Plan

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SHARE COUNT UPDATE

• January 2013 share count assumption of 455M based on $15

p/s stock price

• 10M share increase primarily related to higher share dilution
• n convertible notes & stock options due to Q1 higher stock

price

• March 2013 bought back 23.2M shares at $20.14 p/s in

conjunction with sponsor sale to prevent further dilution on convertible notes

– 8M incr. share dilution based on $20.14 share price vs. $15 assumed

Revised FY:13E 465M Fully Diluted Shares vs. 455M Previously

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RAC UPDATE

PRICING TRENDS WITH FLEET COSTS

Six Months Ended June 30, 2013

Total RPD* YOY%

Worldwide RAC $48.80 0.8% U.S. RAC (incl. DTG/Advantage) $47.32 2.5% U.S. Hertz Brand Airport $55.62 2.8%

*Excl. sublease revenue 95 100 105 110 115 120 125 130 Manheim Used Vehicle Value Index

Moody's Forecast Manheim Index

5 pts Manheim = 2.5-3.0 pts residual value

WW RAC Total RPD Holding Positive; FY:13E +1%

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“Back of the Envelope”

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• 41

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• Adj. Pre-tax

Reconciliation

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Accelerating Cash Flow Generation Accelerating Cash Flow Generation Accelerating Cash Flow Generation Advanced Technology Leader Advanced Technology Leader Advanced Technology Leader Culture of Operational Excellence Culture of Operational Excellence Culture of Operational Excellence Superior Growth Strategies Superior Growth Strategies Superior Growth Strategies Diverse, Global Portfolio Diverse, Global Portfolio Diverse, Global Portfolio

TRANSFORMING HERTZ

Investment Proposition