Hertz Investor Presentation Fireside Chat September 26, 2013 MKM Entertainment & Leisure Conference New York City
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. 1
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. 2
1H:13 OPERATING PERFORMANCE Rental Car Vehicle Rental Car Equipment Off Airport Leasing Leisure Segment Rental Non-res Insurance Construction Replacement Recovery Tuck-in Technology Acquisitions Revenue Revenue Revenue* Revenue +12% +16% +double-digit% +17% 1H:13 Adjusted Pre-tax +74% YoY *Adj for location divestitures 3
FY:13 REVISED GUIDANCE % � YoY September 2013 February 2013 High end of Guidance Guidance forecast Share count FY:13 = 465 mil 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 $1.68 to $1.78 +34% $1.82 to $ 1.92 EPS Free Cash Flow UNCHANGED $500 to $600 mil Cost savings target of $300M to offset inflation (incl. depreciation savings) Higher tax rate of 35% Cash interest expense ~$100 higher YoY ∆ Drivers : U.S. RAC VOLUME/UTILIZATION & WW RAC DEPRECIATION 4
U.S. RAC VOLUME UPDATE HERTZ BRAND U.S. AIRPORT VOLUME REMAINS SOFT 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% SEQUESTER -- 94 industries, accounting for about AIRLINES – Last 12 mos. cut 13M seats… $6T in revenue, are vulnerable to government there is little or no capacity growth in the forecast cutbacks – usnews.com – TIME “August air transactions, processed by mega CONSUMER – U.S. retail sales rose less than travel agencies, down 3.5% YoY. Online agencies forecast; consumer confidence fell to five-month low, experienced 6.7% drop in August air signaling economic weakness transactions.” – Business Travel News “Consumers investing in homes, spend less on other things.” HOTELS – “Worldwide hotel bookings through “Consumers struggle in slow recovery due to higher global distribution channels in August declined payroll taxes, expensive gasoline, and slow job 1.5% YoY.” Business Travel News market.” – Bloomberg WW RAC FY:13 volume estimate now +19% YoY Forecast revision driven by lower Hertz U.S. airport volume 5
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 6
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 on 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 7
RAC UPDATE PRICING TRENDS WITH FLEET COSTS 130 Moody's Forecast Six Months Ended June 30, 2013 Manheim Index Manheim Used Vehicle Value Index 125 Total RPD* YOY% 120 Worldwide RAC $48.80 0.8% 115 110 U.S. RAC (incl. DTG/Advantage) $47.32 2.5% 105 U.S. Hertz Brand Airport $55.62 2.8% 100 *Excl. sublease revenue 95 5 pts Manheim = 2.5-3.0 pts residual value WW RAC Total RPD Holding Positive; FY:13E +1% 8
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TRANSFORMING HERTZ Investment Proposition Diverse, Diverse, Diverse, Superior Superior Superior Culture of Culture of Culture of Advanced Advanced Advanced Accelerating Accelerating Accelerating Global Global Global Growth Growth Growth Operational Operational Operational Technology Technology Technology Cash Flow Cash Flow Cash Flow Portfolio Portfolio Portfolio Strategies Strategies Strategies Excellence Excellence Excellence Leader Leader Leader Generation Generation Generation 10
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