Herc Holdings Inc

Herc Holdings Inc.?

2016 ANNUAL REPORT

OUR VISION

We aspire to be the supplier, employer and

investment of choice in our industry.

OUR VALUES

We do what¡¯s right.

We¡¯re in this together.

We take responsibility.

We achieve results.

We prove ourselves every day.

2016 NORTH AMERICAN

CUSTOMER MIX

2016 RENTAL REVENUE

BY MARKET

152% Local

148% National

183% Key Markets

Oil and

117% Upstream

Gas Markets

2016 FLEET

COMPOSITION

2016 RENTAL REVENUE

BY CUSTOMER

Aerial

119%

Booms

137% Construction

120% Industrial

Other, including:

1¨C43%Government

OUR MISSION

To ensure that end users of our equipment

and services achieve optimal performance

safely, efficiently and effectively.

2016 KEY FACTS

u One of the leading North American

equipment rental companies

u Estimated 3% market share in a highly

fragmented market

7% Scissors and Other

Earthmoving

11% Heavy

7% Compact

1

u Approximately 270 company operated

locations, principally in North America

u $1.55 billion in total revenues

u $3.56 billion in fleet (OEC)*

u 4,800+ employees

Material Handling

114%

Telehandlers

3% Industrial

13% ProSolutions

5% ProContractor

1

113% Trucks and Trailers

8% Other?

¨C Disaster Recovery/Remediation

¨C Infrastructure

¨C Railroads

¨C Utilities

¨C Homeowners

¨C Entertainment Production

¨C Agriculture

¨C Special Event Management

¨C Facility Management

*

Original equipment cost (OEC) as of December 31, 2016, based on

American Rental Association guidelines.

?

Comprised of: 3% Air Compressors, 1.7% Lighting, 1.7% Compaction, 2% Other

A MESSAGE TO

OUR SHAREHOLDERS

I am pleased to present our company¡¯s first annual report as an

independent public company and to share our progress in creating

a premier, full-line equipment rental company.

Herc Holdings Inc. became an independent,

publicly traded company on July 1, 2016, after

separating from Hertz Global Holdings, Inc.¡¯s, car

rental business. As much as that date marks a

seminal event in our company¡¯s history, it also

represents a critical milestone in our ongoing

business-transformation process. Upon our

separation we gained the flexibility to pursue a

long-term business strategy focused exclusively

on equipment rental markets and customers.

That strategy, which includes a number of new

initiatives, programs and actions, is already

showing results.

Our story includes more than 50 years of

demonstrated success as a leader in the

equipment rental industry. Beginning in 1965

as Hertz Equipment Rental Corporation, the

business established a reputation as the goldstandard provider of rental equipment across a

broad array of industries and markets through

its unmatched service and expertise. Today,

Herc Rentals Inc., the principal operating

subsidiary of Herc Holdings Inc., is poised to

build on that legacy through the business

transformation that we began in the second

half of 2015.

We started our transformation with an infusion

of new leadership, featuring decades of

experience in the equipment rental industry,

to drive the necessary operational improvement

across our business. In addition, in anticipation

of our separation we appointed seasoned and

highly regarded executives with demonstrated

success across a broad spectrum of industries

to lead and direct critical public-company

functions and activities.

The new leadership team rapidly coalesced

around three operational priorities: Expand

and Diversify Revenues; Improve Operating

Efficiencies; and Enhance the Customer

Experience. The following offers an overview

of our initiatives to date in each of these areas.

EXPAND AND DIVERSIFY REVENUES

To achieve the growth and deliver improving

financial results, we are expanding our products

and services, broadening our customer base,

enhancing our sales effectiveness, and focusing

our expansion on large urban markets.

Herc Holdings Inc. celebrated

its first day of trading on the

New York Stock Exchange by

participating in the opening

bell ceremony on July 1, 2016.

1 We have expanded and diversified our fleet

with a broader mix of equipment that enlarges

the range of customers and market segments

we serve.

1 We established a specialty business,

ProSolutions?, to provide specialized power,

pump, climate and remediation equipment for

projects that often require technical expertise

and a high degree of on-site customer support

for mission-critical projects. ProSolutions gives

us the opportunity to serve new customers and

markets, increase our value to existing customers,

and accelerate our overall growth.

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A N N U A L

R E P O R T

1

IMPROVE OPERATING EFFICIENCIES

We are making steady progress across our

operations, with an emphasis on supplier

management, fleet availability, margin

improvement, and a strong safety culture.

1 We reduced the number of vendors per

category and class of equipment, and prioritized

our capital expenditures on premium brands

from top-tier suppliers. Along with providing

better buying power as we negotiate our fleet

purchases, our focus on high-quality equipment

reduces lifecycle costs and delivers better

end-of-service resale values while narrowing

the range of equipment brands and parts our

service and repair team must maintain.

1 We continue to make headway in reducing

fleet unavailable for rent (FUR), largely driven

by our Herc Rentals Operating Model, which

ensures a consistent approach to managing,

servicing and repairing our fleet and rapidly gets

equipment ready to rent again.

Our technology

enhancements include our

Herc Rentals mobile app,

which allows customers to

search our entire equipment

catalog; see rental rates by

day, week or month; submit

live reservations; and extend

or call equipment off rent,

among other user-friendly

features.

1 Our strategy to diversify our fleet includes an

emphasis on equipment that improves dollar

utilization to drive margin expansion. This

improvement will take time to gain full

momentum as new categories of fleet are

deployed across our operations and as our sales

organization gains more experience with the

new equipment and our customized solutions.

1 We have expanded our sales force and

optimized our sales territories to intensify our

engagement with current customers and reach

new customers more effectively. In addition,

we have equipped our sales force with focused

training, a best-in-class CRM system and

a technology tool that provides expert

pricing guidance, all of which improve the

professionalism and effectiveness of our team.

1 The ongoing population shift to major cities

will place increasing demand for new or

renovated infrastructure and buildings, which

should create sustainable growth opportunities

for our urban business. From January 2016

through March 20, 2017, we opened eight

new locations in major urban markets and

reconfigured a substantial number of existing

locations with fleet and expertise specific to the

dynamic operations of urban contractors. We

also closed eight locations, which were primarily

related to weak upstream oil and gas markets.

1 We are increasing ancillary revenues, which

grew by 17% in 2016 compared to 2015. Although

these revenues represent a small portion of our

overall revenues, most of the gains we realize

in this area directly benefit the bottom line and

become an important contribution to our

financial performance.

2

H E R C

H O L D I N G S

I N C .

1 We have made a renewed commitment to

building a safety culture across our business,

with an emphasis on ongoing training and

strengthened programs, such as a leadingindicator Safety Dashboard that embeds safety

awareness and behaviors into the daily operations

of every branch location. We have made excellent

progress in improving our safety performance,

but we know that we must remain vigilant and

active in this area in order to be equal to or

better than the industry average in safety.

ENHANCE THE CUSTOMER

EXPERIENCE

We continuously seek to differentiate our

business by delivering a superior customer

experience at every opportunity. That customer

experience depends on a number of factors,

including the variety and quality of the equipment

we offer, the ease of doing business with us

and the added value we offer through services

and technologies that improve customers¡¯

productivity and efficiency.

1 Our investment in top-tier brands addresses

our customers¡¯ preferences and expectations for

gear that¡¯s reliable, safe, efficient, and effective.

At the same time, we have added more solutions

experts to our team to help our customers achieve

the best results for their projects. More and more,

customers come to us for our insight, technical

knowhow, responsiveness and full commitment

to their success.

1 Our technology enhancements, including our

Herc Rentals mobile app, our refreshed website

and ProControl advanced telematics platform,

enable us to drive improvements in customers¡¯

efficiency and productivity. In developing these

technologies, we have adopted a ¡°mobile-first¡±

philosophy to offer the convenience and

on-demand access to data and information

our customers increasingly expect.

1 Our new name and Herc Rentals brand reflect

the customer experience we seek to cultivate as

we build on more than 50 years of leadership in

the equipment rental industry. We intend to be a

comprehensive solutions provider across a broad

range of customer and market segments, product

categories, service and technology offerings,

and technical and project expertise.

TRANSFORMATION IN PROGRESS

The ultimate measure of our progress will be

reflected in our financial performance. Despite the

challenges of weak upstream oil and gas markets

this year, we made steady progress in the

implementation of our business transformation.

We reported $1.35 billion in equipment rental

revenue for 2016, a 4.2% decline compared with

$1.41 billion in 2015. Equipment rental revenues in

2015 included 10 months of operations in France

and Spain, which were divested in October

2015. Excluding the divestiture and impact of

foreign exchange, equipment rental revenue

increased 0.5%.

Excluding upstream oil and gas markets,

equipment rental revenue increased 8.1% in 2016

compared with 2015. The steady improvement

of results in key markets offset weak upstream

oil and gas markets in 2016. We reported

positive pricing improvements in 2016, with

key markets outside of upstream oil and gas

increasing 1.6% in 2016 compared with 2015.

Strong gains in renewals of national accounts

and growth in local revenues¡ªdriven by our

expanded sales force and greater focus on major

urban markets¡ªhelped to lift pricing.

We reported a net loss for 2016 of $19.7 million

compared with 2015 net income of $111.3 million.

The decline reflects the impact of lower results

from our oil and gas markets and losses from

sales of revenue earning equipment. In addition,

Our fleet reflects an expanding and diversified mix of

equipment to reach a broad range of customers and market

segments. New equipment categories, including contractorgrade tools and trucks, and cooling, heating, dehumidification,

remediation, and building maintenance gear, represent

additional opportunities to serve existing and new customers.

2 0 1 6

A N N U A L

R E P O R T

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